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But thanks to the public ledger that is the blockchain, we know which coins came from the Feds, and as such, which not to accept! Don't let them get away with it, folks.
The feds selling the bitcoin would be an endorsement of it and the market they used to sell as being legal. This could push the price up.
Based on the current price it makes roughly 25K bitcoins, and using the current BUY backlog on MtGox, selling them would push the price back to $550. However such a volume will certainly create a panic wave and it could go below that. If they are clever, they won't put everything on the market like this.
Why would the feds care about crashing BTC? If anything, it seems like it might be a desirable outcome for them.
Earlier quoted context omitted.
Actually it might be interesting. Technically yes if they sold at any price they'd burn through the orderbook and the price would crash. But if they set a flat sell price then that'd make a buy (edit: sell) wall (price can not go above this amount until all 25 million have been purchased). The sell wall could help stabilize the price.
They are not buying coins, they are selling them, so it would be a sell wall. The price couldn't go _above_ their selling price until all 25 million (dollars worth) have been sold.
Hold on they haven't found anyone guilty in a court yet have they?
I don't think they have to get a conviction in order to permanently keep (or sell off) seized assets.
So that will depress the price right? Time for some cheap BTC
Price movements occur as a result of a buyer or seller aggressing into a market and submitting an order such that the parameters of the aggressor's order match the opposite sides unfilled orders. This process is typically referred to as order matching. If a buyer aggresses into the market and matches against unfilled sell orders the price increases because they have removed the lowest prices from the order book. If a seller does something similar the price will drop because the highest prices have been removed.
Another reason price movements occur is because people are also reacting to the market and trying to predict where the market is going. As a consequence they will either enter the market at an off market price attempting to predict it, or cancel their outstanding orders and re-price them. But this is another topic entirely and I will leave it out as it's pretty complex and my understanding of that topic is newb level at best.
The second thing to consider is the why. Why do price movements occur? Mainly because people are consuming information and trying to predict where the market is going. For other assets such as FX & commodities there are non-speculative market participants who buy and sell based on their business need. An example from Foreign Exchange is a company such as Google having a stockpile of dollars and needing to pay employees in euros. The end result of these non-speculative market participants is greater price stability because they are always buying or always selling, not because they want to, but because they have to. But since bitcoin is largely a speculative currency (the majority of bitcoin trading volume is the result of speculation, not legitimate commerce) the news has a disproportionate effect on it's prices.
My 2 cents say that this will temporarily depress prices but they will quickly recover because someone such as myself recognizes that those bitcoins haven't entered the market, so nothing has really changed.
Earlier quoted context omitted.
Maybe that's exactly what they want to do to this rogue currency...
They might want to, but I think it is illegal to. They have to auction it just like all other siezed assets.
Earlier quoted context omitted.
Why would the feds care about crashing BTC? If anything, it seems like it might be a desirable outcome for them.
Because they want the money. Same reason they auction off the cars of suspected drug dealers, instead of just handing them out at random.
Selling at the immediate price they can get in a very volatile vehicle is not 'handing them out at random'.
Earlier quoted context omitted.
Only if they try to sell them in a trading venue. Anyone with the bankroll to buy that many probably understands how markets work.
Rereading my prior post, it was a little unclear. Let me expand on my prior point. The Bitcoin market is neither liquid or large enough to absorb 30k new coins and remain stable. That means the US government isn't going to get $850 per coin. The effects on the market will likely depend on how the coins are sold. Scenario 1: There is a single large buyer. Assuming the buyer and US goverment are smart, they will recogn…
Buyer and Gov settle as a well below market price, possibly to rid of these e-tokens. Buyer then floods the market with cheap coins that are still a markup from what he bought them at. Market panics ($1000 vs $100), price of bitcoins drops.
So that will depress the price right? Time for some cheap BTC
Probably. To understand price changes it's important to consider how they change. Price movements occur as a result of a buyer or seller aggressing into a market and submitting an order such that the parameters of the aggressor's order match the opposite sides unfilled orders. This process is typically referred to as order matching. If a buyer aggresses into the market and matches against unfilled sell orders the pri…