Ernst & Young to auction 24,518 Bitcoins in second auction globally

Ernst & Young (EY) plans to auction 24,518 bitcoins in Australia on the 20th of next month, currently worth approximately $16 million.

EY transaction partner Adam Nikitin said an unidentified supplier had asked EY to sell the bitcoins, which were confiscated from criminals last year.

EY plans to divide the bitcoins into 12 lots and sell them in a 48-hour closed-bid auction on June 20 and 21, with each lot expected to fetch more than $1 million.

Eleven of the 12 bitcoins consist of 2,000 bitcoins, and the remaining one consists of nearly 2,518 bitcoins. Bidders will be able to bid for these 12 bitcoins.

The auction will be the first in Australia and the second in the world to sell bitcoins in this form. In the world's first bitcoin auction in 2015, the US Marshals Servic sold 144,000 bitcoins, worth about $122 million at the time. The bitcoins were seized from online drug marketplace founder Ross Ulbricht, who was sentenced to life imprisonment for his website Silk Road, but has appealed. At the time, his bitcoins were also sold in several lots.

Nikitin expects buyers for the Australian auction to come from North America and Europe. He said:

“With each Bitcoin currently valued at over $1 million, we are targeting sophisticated investors who can see the value in investing in a growth-oriented digital asset.”

Interest in Bitcoin technology continues to grow. The number of Bitcoin transactions has quadrupled since 2012, and institutions are seeing more and more opportunities and use cases for the technology.

On May 28, 2016, the price of Bitcoin exceeded $500, reaching a new high since August 2014, and rose by nearly 10% in one week.

Rather than selling the bitcoins on an exchange, the best approach would be to sell them off-market through a closed sale. Using an exchange would drive the price of bitcoins down significantly, which is not the purpose of this sale. EY wants to get the highest price for the bitcoins. A bidding war looks like a very attractive option to achieve this goal.

Nikitin expects digital asset investment managers, cryptocurrency exchanges, investment banks and hedge funds to be interested in EY’s auction.

Nikitin said interested parties can submit their expressions of interest via email between June 7 and June 10. Email address: [email protected]

Although Bitcoin still remains on the fringe of currency, the blockchain technology behind Bitcoin has attracted the interest of major financial institutions around the world.