In a move that would later haunt their accounting books, the US government conducted its first-ever Bitcoin auction in June 2014, selling a massive stash of 29,656 BTC for what now seems like pocket change — just $18 million. That’s roughly $607 per bitcoin. Venture capitalist Tim Draper swooped in and claimed the entire lot, beating out 44 other registered bidders.
But wait, it gets worse. The government wasn’t done selling. They had more bitcoin burning a hole in their digital pocket.
In December 2014, the US Marshals Service held a second auction, offloading another 50,000 BTC. This time they divided it into 10 blocks of 3,000 BTC each. The average price? About $370 per bitcoin. Do the math — that’s around $18.5 million for coins worth billions today. Ouch.
These weren’t just random bitcoins. They came from the infamous Silk Road shutdown, where authorities seized approximately 144,000 BTC, plus another 30,000 BTC from other cases. The government was sitting on over 1% of all bitcoin in existence at the time. This was during a period when Bitcoin was still recovering from the $30 peak it reached in June 2011 before settling back down.
The auction process wasn’t exactly casual. Bidders needed to register with the US Marshals Service and put down a $200,000 deposit just to participate. The whole thing went down via email during a 6-hour window, with winners notified shortly after.
Surprisingly, the auctions barely affected the market. Bitcoin was trading around $570 before the first auction and stayed relatively stable afterward. No panic selling. No crash.
Looking back, the government’s decision to sell has aged like milk. Those 50,000 bitcoins would be worth approximately $4.4 billion today. The substantial appreciation reflects Bitcoin’s status as a store of value that many investors now compare to gold for hedging against inflation. Critics have slammed the feds for selling too cheaply and lacking transparency in the process.
The auctions did accomplish something, though. They established how the government would handle seized cryptocurrency and sparked conversations about regulations. They also proved one thing beyond doubt: even the feds can’t predict bitcoin’s future. After these auctions, the USMS still maintained a substantial 94,000 BTC in their holdings, which they planned to sell over the following months.
