ForexMinute.com – The US Marshals Service (USMS) might auction off Ross Ulbricht’s 50,000 Bitcoin at discounted rates, says a research note from the world’s leading financial company Citi.
First reported by CoinDesk and written by Citi’s chief forex strategist Steven Englander, the internal note speaks of bidders who would want to “lowball their bids [on Bitcoins] relative to [their] current market place”. In his explanation, Englander highlights the USMS’s decision to sell-off around 94,000 more Bitcoins that is likely to influence bidders towards quoting a lower value.
“Bidding above the market price does not seem like a strong strategy given that there are 90,000 more to be auctioned off and there has been plenty of opportunity to buy bitcoin on the cheap in recent months.”
Excess supply one of the major reasons
Englander saw the entire matter from the buyers’ point of view, who would not think bidding above the market price as a good strategy. In the previous auction, Tim Draper was rumored to have bought the 30k Silk Road Bitcoins at a price higher than market value. Following that day, Bitcoin’s value has dropped from $640 to $379.
“My expectation is that most bids will be aggressively to the downside in the hope of getting a post-Black Friday bargain,” Englander said. “Bids for a block or two may be at a moderate discount to the market price, but I would expect the bid for the biggest number of blocks to be at a hefty discount.”
Holder or Seller
The Bitcoin market reacts to fear, as we have seen throughout these past months. Imagining a user holding a huge chunk of Bitcoin single-handedly provokes negativity, which ultimately repels more buyers into the market. However, the future Bitcoin price movements could be solely dependent on the user’s choice to either sell or hold his investments. User might sell these Bitcoins directly in the open market as well, that can influence price to the upside levels.
To contact the reporter of the story: Yashu Gola at email@example.com