€11m-worth of seized bitcoins to be auctioned in Australia

30 May 2016

Australian police are about to auction off a treasure trove of more than 24,000 bitcoins that it has seized from criminals, which has an accumulated value of more than €11m.

As a cryptocurrency, bitcoin remains the best-known and most heavily-used deregulated and anonymous currency out there, with each bitcoin currently trading for just under €500 and, now, 24,518 bitcoins are about to be sold off as part of a massive auction in Australia.

According to the Sydney Morning Herald, the haul of bitcoins has been held in the possession of Australian police for three years now, having been seized following the arrest of a drug dealer in Victoria who was using the cryptocurrency to sell his products anonymously online.

It was only in 2015 that the police followed up on this initial raid by saying that it had planned to “make the most of” the huge haul, and now it will be flooding the market, which should prove interesting in terms of how this will affect the price of bitcoin.

To be run by Ernst & Young, the June auction will be open to bidders from across the globe, making it the first such major sale to occur outside of the US, where an enormous cache of 175,000 bitcoins was sold following the arrest of Silk Road founder Ross Ulbricht.

A timely auction

Any plans of picking up one or two bitcoins will be scuppered, however, by the reality that this auction will sell them in blocks of 2,000, which, going at today’s rate, will cost just under €1,000,000 each.

Speaking to the BBC, economic historian Dr Garrick Hileman said that the timing of this auction in June is important as it will come prior to major changes expected to occur from 14 July with the cryptocurrency.

“The bitcoin protocol is designed to reduce the number of new bitcoins miners are given as a reward for processing transactions every four years,” he said.

“The reward will be halved on 14 July, so prices could go up due to the reduced supply of new bitcoins.”

Bitcoins auction image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic