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Comment by dkyc | Hacker News Reader

Last time the US auctioned off bitcoins, the price was above market price [0]. A VC wanted to buy a large chunk of bitcoins for a company he invests in without driving up the price.

[0] http://www.bloomberg.com/news/2014-07-01/bitcoin-auction-end...

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I don't see anywhere in your cited article that says the coins were purchased for more than market price. Can you point it out for me?

Additionally, if you were a rational investor who believed the coins were worth above market price, why would you not additionally buy up any coins on the market that were selling below that price? Ultimately, bidding up the market price to whatever the "above-market" bid was.

For a rational investor it would make sense to bid above "market" price. There are many markets, and those markets have a limited volume of coin to sell. Buying 30k coins would have a big effect on the price of any single market.

Bitstamp, which says "world's leading bitcoin exchange" about itself can't sell you 30k coins right now. Oh, and bitcoin exchanges have a history of.. let's call it.. problems.

A rational investor who wants to buy a large volume of coins would certainly bid above "market" price for coins handled by a reputable seller.

You seem to have misread my post. I didn't say that no one would bid above market price, I stated that they would additionally buy up all the coins on the market below their buying price.

Ah, you're right. But buying coin from different markets still has risks and takes time (which is money). Of course, it depends on your priorities.

Wouldn't that risk driving up the market price of bitcoins, which leads to a higher competing bid on the bulk coins?

Well you wouldn't want to do it before the bids are in. However, there was a gap between when bids are placed and when the winner is announced, that would be a good time.

edit: Of course, any time after the bids were completed would be a good time. After the auction ends would be just as good for you.

Nothing in that article states that the coins were sold above market price. The only publicly known data points were some significantly below-market bids (<$500 when the market price was ~$600) that did not win.

There were some public statements by executives at several bitcoin exchanges who revealed their losing bids, and they were close to (but below) market price, so it's not unthinkable that the winning bids were for market price or above.

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