Barry Silbert Partners With Bitcoin Trust to Bid in the Silk Road Bitcoin Auctions

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Barry Silbert Partners With Bitcoin Trust to Bid the Silk Road Bitcoin Auctions

Barry Silbert, the founder of Digital Currency Group, SecondMarket, and creator of BitcoinTrust, tweeted today that BitcoinTrust and his Bitcoin trading desk will be forming a syndicate to bid in the US Marshals Bitcoin auction. Rest of the details are yet to come; however, the message is loud and clear that does not want to miss this time.

He is going to face a challenge from venture capitalist Tim Draper, the sole winner in a June auction of about 30,000 Bitcoin. Draper says that he plans to bid again when the US government sells an even bigger cache of the virtual currency next month. As the date nears, several more bidders will be jumping in.

Earlier, the US Marshals Service announced that it plans to sell 50,000 Bitcoin in a Dec. 4 auction to get rid of the Bitcoin seized after the illicit Silk Road marketplace was shut down last year and its operator, Ross William Ulbricht, was arrested. Soon after the announcement, a lot of investors have started mulling their plans to bid.

Bitcoin’s Exchange Value has Fallen Significantly over the Months

So far Barry Silbert and Tim Draper, co-founder of investment firm Draper Fisher Jurvetson, have shown their interests. Draper though has an edge as he is the winner of the last bid wherein he paid an undisclosed sum. He had outbid 45 bidders for the 30,000 Bitcoin worth about $19 million based on exchange prices at the time.

Interestingly, since the bid for 30,000 Bitcoin in June, the value of Bitcoin has declined about 42 percent to $373.64. The now announced bid for 50,000 is almost $19 million which several investors can afford easily. Even if they are not able to fund the bid on their own, they are willing to form a syndicate, Barry Silbert is one of them.

Draper admits that he planned to help provide access to Bitcoin in developing economies and use the Bitcoin won in the auction as a source of liquidity. According to him, he has made 17 investments in Bitcoin companies so far, and plans to make more.

Tim Draper has edge over other investors like Barry Silbert who may face trouble raising the bid amount. When an investor is bidding with syndicate he has to get an agreed price which may be low and may not win the bid; however, there is no such restriction with him.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com