BBC news: Police confiscated Bitcoins worth £8m in Australia will be for auction this June. A total of 24, 518 Bitcoins will be divided mostly into blocks of 2,000 each and will be sold at £680,000 each. The firm Ernst and Young will be organizing the said auction. They said that the Bitcoins are seized from illegal activities but did not give any specific details about it.

In 2013, Newspapers in Australia reported a 24,500 seized bitcoins in the state of Victoria from a man who was arrested from dealing illegal drugs online. According to Sydney Morning Herald, Victoria’s department of Asset Confiscation Operations said that they would be making the most out of the 24,500 declared total numbers of confiscated Bitcoins.

A large buck

Today, there are 4,000 new bitcoins produced everyday which are rewarded to miners who use up their electricity to process bitcoin transactions.

According to BBC news, Dr. Garrick Hileman, an economic historian at Cambridge Centre for Alternative Finance, said that this amount of Bitcoin is significant. He added that this amount is a week’s worth of new Bitcoins mined out to the market.

The 24,518 seized bitcoins are to be sold in blocks since selling it as a whole will greatly affect the market negatively. Dr. Hileman said that normally, every time 10,000 bitcoins are being sold, the price at the market can be stirred significantly.

Bitcoin’s price mounted to $538.15 as of this time of writing and it is the highest since August last year. Dr. Hileman said that the authorities chose this time to sell the coins since they consider it as a “safe” time to sell due to uncertainties upcoming in the halving this July.

The reward for Bitcoin miners will be halved this coming July 10~12. It is designed that every four years, the quantity of new Bitcoins generated as a reward to miners will be reduced into half or the so called “halving”. Thus, the price of Bitcoin could rise due to the decrease in supply of new Bitcoins. Nevertheless, there are still uncertainties since there could be a decline in security during halving. Therefore this month is a safe time to sell.

An example

US Marshals Service in 2014 auctioned 175,000 bitcoins which are seized from the internet black market, Silk Road. The auction involved 11 bidders probably because of the high cost of each block on sale. This auction has set a precedent that Bitcoin is not illegal.

The said Australian auction is the first such sale set outside of the United States. It will be open to bidders worldwide. Dr. Hileman said that this sale of seized bitcoins by the Australian authorities is recognizing the cryptocurrency as not illegal. He added that when a government sells bitcoins, it acknowledges that those are different asset to illegal drugs or to any kind that would be sold in an auction. Thus, through its own regulatory efforts, Australia is making a stand that Bitcoin is legal to use in the country.