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The US Government Sold Some Bitcoin – and Got a Good Price

The General Services Administration has been auctioning bitcoin since 2014, when the FBI shut down the Silk Road black market.

Mar 18, 2021 at 8:09 p.m. UTC
Updated Sep 14, 2021 at 12:29 p.m. UTC

CORRECTION (March 25, 12:47 UTC): An earlier version of this story misinterpreted auction results from the U.S. General Services Administration. The buyer paid above the market price for the bitcoin, not below. An editing error was to blame.

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.

But apparently, the government got a good deal.

The Washington Post reported that 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 0.7501 BTC for $53,104. That works out to $70,796 for a full bitcoin – more than 20% over the market price of about $59,000 on March 17.

The government told the newspaper the auction commanded a premium relative to the market price.

“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.

DISCLOSURE

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