itBit Wins 5 Blocks In The Latest Silk Road Bitcoin Auction

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<
The auctions arising from the seizure of the Silkroad marketplace in October of 2013 have finally finished, and with it end one of the final chapters of the world’s first darknet market.

The Silkroad marketplace had started out in February 2011, as an online space hidden behind the Tor browser that offered anonymity in Internet purchases. It used Bitcoins, the world’s first cryptocurrency to trade, and pseudonyms for buyers and sellers, thus making all exchanges virtually untraceable.

Unsurprisingly, Silkroad became a hotspot for dealing in illicit substances, and was soon on law enforcement’s radar.

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Silkroad unravelling began in 2012 when the Baltimore Silkroad Taskforce began undercover operations designed to unmask the person behind the infamous marketplace.

Due to the work of authorities, Mr. Ross Ulbricht aka Dread Pirate Roberts, the originator of Silkroad, was arrested in October 2013 for his handiwork in founding and overseeing the Silkroad site. Following his arrest officers confiscated 26,000 BTC from the site, and then later 144,000 BTC from the laptop belonging to Ulbricht.

Silkroad Bitcoins Are Being Auctioned?

Book and Hammer
These Silkroad bitcoins have been slowing getting sold off in auctions conducted by the U.S. Marshal’s Service.

The first lot of seized bitcoins went up for sale in June of 2014, and came to a total of 30,000 BTC overall. The currency was split up into “blocks” and attracted 45 bidders placing a total of 63 bids.

Following rounds of auctions saw an increase in the number of bitcoins available, but a decrease in the number of bidders. All bidders were expected to make a US $100,000 per block deposit before entering the bidding process.

Who Have Silkroad BTC Gone To In Previous Rounds?

The winner of the majority of the blocks in Silkroad first round of auctioning off was Tim Draper. Draper is a venture capitalist with investments in companies such as Hotmail and Tesla. He cited his reasons for bidding as “wanting to strengthen cryptocurrency markets for international countries that have weak currencies.”

A syndicate helmed by venture capitalist Barry Silbert was the major winning bidder in the second round of Silkroad auctions totaling 50,000 BTC, where 11 bidders made a total of 27 bids.

In the third round of Silk Road auctions, totaling 50,000 BTC, in March of 2015, itBit reported that they had managed to win 3,000 worth of bitcoins.

Who Are itBit?

itBit is a financial services company specializing in bitcoins that first came on to the scene in April of 2012. They are a forward-thinking institution that strives to provide an accessible, legitimate and relevant service for those wanting to trade in cryptocurrencies.

Following itBit’s win in the third round of auctions, they applied for bitcoin’s first banking license, and in May 2015 were granted it by the New York Department of Financial Services.

In the fourth and final round of the Silkroad auctions held over six hours on November 5, itBit managed to outbid its competitors in grabbing a maximum amount of five block of the 44,000 bitcoins auction, which resulted in a win of approximately 10,000 BTC.

What Does This Mean For The Bitcoin Market?

Cash
Initially, before the completion of the first auction, analysts were uncertain of the anticipated effect of the auction on the price of bitcoins. If extra currency suddenly entered the market, then this would usually signal a drop in price.

However, the bitcoins weren’t immediately used.

If we can go by the history of what has happened in the price of bitcoins before, during and after the markets, then we needn’t be too worried. Following the end of the first Silkroad auction the price of bitcoins actually rose substantially, from 585 dollars beforehand up to 600 dollars following.

Prior to the second Silkroad auction the price of bitcoin plummeted, and remained low for a short time before recovering to previous prices.

A similar effect occurred in the third Silkroad auction.

Due to the knowledge that is it unlikely any of the winning bidders bitcoins will end up flooding the market anytime soon, we can be somewhat reassured that the price of bitcoins will remain on its course at present.

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