A key reason bitcoin‘s price has doubled this year, according to many analysts, is so few holders want to part with the cryptocurrency: “more buyers than sellers,” as the old Wall Street adage goes.
Unless you’re the U.S. government, which this week sold some bitcoin for dollars.
The amount was tiny in relative terms – not even an entire bitcoin, just 0.7501 BTC, worth a little over $40,000. Compare that to the current federal budget deficit, projected during the current fiscal year to exceed the record $3.1 trillion reported for 2020. A veritable drop in the bucket.
However, the winning bidder got a good deal.
The Washington Post reported the U.S. General Services Administration (GSA), which held the two-day event that ended on March 17, often holds auctions, usually of surplus federal assets such as office furniture, school buses and aircraft parts.
However, GSA told the Post the federal government has been auctioning bitcoin since 2014, after the FBI shut down the online black market Silk Road and seized more than 170,000 bitcoin in the crackdown.
In this week’s auction, the winning bidder got the bitcoin for $53,104.
According to CoinDesk’s Bitcoin Price Index, the cryptocurrency never fell below $54,200 on Wednesday, and it has since jumped to about $59,000.
The government told the newspaper the auction commanded a premium relative to the market price. The GSA didn’t immediately respond to a request for comment from CoinDesk.
“Auctioning off this share of cryptocurrency broke new ground for our GSA Auctions platform, and we’re extremely pleased by the enthusiasm we’ve seen from our bidders,” Acting Regional Administrator Kevin Kerns, with GSA’s southeast sunbelt region, said in a statement to the Post.