SecondMarket wins 48,000 bitcoins from Silk Road auction

New York bitcoin exchange SecondMarket nearly swept the US government’s second auction of crypto-currency seized from illicit online marketplace Silk Road last year, winning 48,000 out of 50,000 bitcoins.

The exchange’s syndicate received 104 bids from eight parties.

Venture capitalist Timothy C. Draper took 2,000 bitcoins at the auction last week, bidding on behalf of his venture firm, Draper Associates. Draper won all of the 30,000 bitcoins offered in the United States Marshals Service’s first auction in June.

Prominent bitcoin players including Pantera Capital and Mirror, previously known and Vaurum, also took part.

Silk Road was shut down in October 2013 when authorities discovered it was being used as a marketplace for illegal drugs and other activities. The government seized 173,991 bitcoins from the online bazaar, and plans to hold at least one further auction in the coming months.

The Marshals Service said that only 11 bidders participated in last Thursday’s auction, when 47 took part in the first. The service received 27 unique bids this time round, a sharp decrease from 63 in June.

While the wild bitcoin price fluctuations have calmed, this new stability may have discouraged opportunistic, short-term investors from bidding in this latest auction, David L. Yermack, a professor of finance at New York University’s Stern School of Business told the New York Times.

But other crypto-currency specialists see this apparent reduced interest as a sign that the bitcoin market has matured. Volumes have picked up, meaning it is now easier for investors or enthusiasts to get their hands on larger amounts of bitcoin.

No dates have been set for the next auction.

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