This week could pose a great buying opportunity for bitcoin investors. The US Marshal’s Bitcoin Auction will take place on Friday, June 27, from 6:00 AM to 6:00 PM / ET and nearly 30,000 bitcoins are up for grabs. Since the announcement of this auction the price of bitcoin has decreased and I expect the price to continue to decrease throughout this week, due to speculators believing the sale will oversaturate the market.
At the time of this writing, the price of bitcoin is at $590 on CoinBase. I predict a 20 – 32 percent price decline by Saturday, June 27, but I don’t expect the price to decrease below $400.
Harry Yeh of Binary Financial agrees:
We expect there to be some volatility and increased trading volume this week. There may also be some heavy selling pressure leading up to, and on the day of the auction, causing the price to drop.”
Accredited investors also have the option of participating in SecondMarket’s US Marshal’s Bitcoin Auction, which should be simpler than direct participation in the government auction, but requires a 5 percent facilitation fee. Order deadline is Thursday, June 26 at 12:00 PM / ET.
Here’s a summary of the not-so-boring bitcoin industry last week:
The US Marshal’s office accidently responded to an interested auction participant’s email with about 30 other names CCed, revealing the identity of all other people interested in bidding on the government’s coins. Since this email went out from the Marshal’s office, the CCed interested participants began expressing serious security concerns, while others took the opportunity to introduce themselves to some of the bitcoin celebs on this list.
One person responded to the email chain saying, “wow, wow, wow did the US Marshal just send a circular, well I suppose I’ll use this chance to sell my band,” which was followed with a link to a music video.
Another person replied, “This just wreaks of incompetence.”
This auction is expected to be the most widely watch bitcoin sale in history and the government has already given the media something to write about.
Last week Canada passed a budget implementation bill, which included several provisions that will affect bitcoin commerce. According to attorney Christine Duhaime, the most important aspects include anti-money laundering reporting requirements that look onerous and could hinder bitcoin businesses in Canada. The anti-money laundering laws were first largely written in the 1970’s, before the internet. If Canada is trying to fit this transformative technology into a box that was built for brick and mortar financial institutions, it simply does not make sense.
With intentions to protect the purchasing power of the boliviano, the country’s central bank says it is illegal to use any kind of currency that is not issued and controlled by a government. Bolivia is the first country to issue such a ban. However it is not clear how the country plans to enforce this, since it would be difficult to do so unless they turn off the country’s internet access.
The ban may be used to stop the rich from hiding their wealth in bitcoin. The effect probably will not have much impact on the bitcoin market price because Bolivia is not a major player in this space. As one of the poorest countries in Latin America, bitcoin could have helped raise the standard of living in Bolivia by bringing basic financial services to the under-banked.
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BitPay announced last week that they are sponsoring the annual college football postseason game played in St. Petersburg, FL. Starting December 26, 2014 the bowl will now be called the Bitcoin St. Petersburg Bowl. BitPay is the title sponsor for the next three years through the 2016 game.
Tony Gallippi, BitPay Executive Chairman said, “Our goal is to continue to move bitcoin into the mainstream, and sponsoring the St. Petersburg Bowl offers us that opportunity.”
It is very strategic and honest of BitPay to use ‘bitcoin’ as the title sponsor as opposed to promoting their own brand, said Matthew Roszak, a Bitcoin venture capitalist, “the industry is in a thoughtful and aggressive ‘educate the masses phase’ and this is a perfect example.”
The Bitcoin Bowl will take place on December 26, 2014.
BitGo announced they have raised $12 million in Series A Financing led by Venture Capital firm, Redpoint Ventures. New BitGo investors include “Radar Partners, Founders Fund, Barry Silbert’s Bitcoin Opportunity Corp., Liberty City Ventures, Crypto Currency Partners, Ashton Kutcher’s A-GRade Investments, and a number of top Bitcoin industry executives and angel investors.” BitGo launched the first multi-signature e-wallet and prides itself on being the leading Bitcoin security platform.
New investor Ashton Kutcher told Boring & Company, LLC that
“Creating great security technology is an evolutionary process that is most successful when you have a company 100 percent focused on it. BitGo is the best solution I have seen to date and the company has an incredible opportunity to own the security market for bitcoin.”
While the Winkelvoss twins’ bitcoin fund is still awaiting SEC approval in order to begin issuing public securities, their index, the Winkdex, is now available on Bloomberg terminals, joining three other bitcoin companies Kracken, CoinBase and BitStamp. The Winkdex bitcoin price is calculated by “blending the trading prices in USD for the top three qualified bitcoin exchanges during the previous two hour period using a volume-weighted exponential moving average.”
Senator Branden Peterson, Executive Director of Yesbitcoin announced this week that he plans to make bitcoin a household name. Yesbitcoin hopes to become the leading strategic, consumer and merchant-facing communications effort on bitcoin. He told Boring & Company, LLC that
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“We plan to do boots on the ground type work in consumer facing communications.”
Because Bitcoin is a decentralized technology, marketing and communications for bitcoin are essentially a ‘tragedy of the commons’ economic issue. Doing this work type of work though a non-profit might be the best industry solution. Funding for Yesbitcoin mostly comes from community and institutional donations.
Chinese Bitcoin Exchange, Huobi, is scheduled to launch a digital currency derivatives trading platform on July 31. BitVc, will include margins trading and interest bearing accounts. With the government and central bank of China’s hostility towards bitcoin, it is not surprising to see Chinese bitcoin companies branch out into new markets and we can expect to see more of this.
Huobi CEO says that they have more products in the pipeline to be released around November.
Online payment processor, Digital River, announced that it has added bitcoin has a payment option for its merchants in the United States. Digital River processed over 30 billion in online payments last year.
“Bitcoin will now be available along with other international payment options, such as credit and debit cards, wire transfers, bank transfers and third-party wallets.”
As one of the first multi-platformed payment processors to accept bitcoin, Digital River is an example of the traditional payment system moving forward and taking market share in this new technology.
July Bitcoin Events:
July 3: BitFin 2014 Conference, Dublin, Ireland
July 8: NexisLexus, Bitcoin Regulation webinar
July 9 – 12: FreedomFest, Las Vegas, NV bitcoin panel on Friday, July 11
July 19 – 20: The North American Bitcoin Conference, Chicago, IL
July 23 – 24: Coin Congress, San Francisco, CA