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Bitcoin Exchange Gemini to Launch Daily Auctions

Bitcoin has seen a significant shift in price level going into the last week of September. Breaking the support at $600, the prices rammed into its support around $595 and rebounded back to higher level. While the support at $595 looks strong, whether the prices will bounce back above $600 again depends on the fundamentals. While currently there are no strong fundamentals to direct the price, let’s look into the latest developments in the market:

Winklevoss Bitcoin Exchange Gemini to Launch Daily Auctions:

Gemini Trading, the bitcoin and ethereum exchange, founded by Winklevoss brothers, is all set to host daily bitcoin auctions. Such auctions are common for New York Stock Exchange or Nasdaq to determine more accurate closing prices for the day. However Gemini is positioning the auction as more than a first for its exchange.


Tyler Winklevoss stated:

“It’s the first ever end-of-day auction on a bitcoin exchange. It’s a pretty standard feature on traditional exchanges that didn’t exist on a bitcoin exchange until now.”

The launch represents the effort by the Winklevoss brothers to create investment mechanisms for mainstream investors. Beginning at 5pm ET every day, Gemini will begin accepting two-sided bids in BTC/USD for the next day’s auction.  By concentrating liquidity at a single moment each day, Winklevoss says the auction will increase liquidity. At the same time, this will minimize “slippage” that results from large investors who affect the price with their purchases. After 22 hours and 50 minutes of bidding, Gemini will begin publishing “indicative auction prices” every minute. This gives the bidders a chance to pull out their bids until 3:59pm ET, after which the final bid closes. The closing price is the price at which the greatest aggregate buy and sell demand meets.

Accenture and Microsoft reveal Blockchain plans:

Last week, an executive from Accenture described Bitcoin’s immutability as a weakness. Now, the company has designed a distributed ledger platform to address this alleged fault. Accenture says data is viable for edits on this blockchain, but only under “extraordinary circumstances.”  The prototype according to Accenture is immutable to its user base but, if necessary, designated administrators can “edit, rewrite, and remove blocks of information.” The company claims it enables this feature with a new function called “chameleon.”

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While Accenture is ready with a prototype, Microsoft announced the updates on “Bletchley Blockchain Project” during Blockchain week in Shangai. Project Bletchley aims to harness the power of consortium-based blockchains. Bletchley creates a template that enables customers to “spin up” a consortium network using a permissioned version of Ethereum. The Azure initiative also introduces Cryptlets, a primer for “next generation” blockchain applications. Similar to the Hyperledger Project, Bletchley aims to deliver a blockchain application fabric. Microsoft says this initiative will allow enterprises to collaborate with operations differently. With the template and Cryptlets, developers can get the foundations for building distributed ledger apps.

Will the Bitcoin auction ruin the bull run?

U.S. Marshals Service Announcement

Whenever there has been a debacle in the Bitcoin world, US government has stepped in and appropriate actions have been taken. More than 2,700 bitcoins were forfeited from various cases revolving around cryptocurrencies. This includes that of the notorious online black market, Silk Road, which was shut down by the FBI in 2013. Silk Road was an online channel for anonymously dealing drugs and selling other illegal goods.

In an announcement released, the USMS said that the online auction will take place on Monday, August 22 from 08:00 EDT to 14:00 EDT. Those interested in acquiring these lost asset have until 12:00 EDT on Wednesday, August 18 to register. It will consist of just one block, and a $100,000 deposit is required.

Block composition for auction

The bitcoins auctioned off this month also include the case involving Carl Force IV. In July, he pled guilty to money laundering and of stealing hundreds of thousands of dollars in the digital currency while working undercover on Silk Road under the codename ‘nob’. He was sentenced to 78 months in prison.

The block might also include bitcoins from Shaun Bridges, former Secret Service agent,  who pled guilty to stealing over $800,000 worth of bitcoins while working on the Silk Roadcase. He was sentenced to serve 71 months in prison.

This auction by the USMS is one of latest involving the digital currency, bitcoin. In November, the U.S. Marshals Service auctioned off the final auction of Silk Road assets. This included 44,431 bitcoins amounting to over $15 million.

Implications on Price

The last time an auction happened for selling recovered bitcoins, there was heavy volatility in the market and the price crashed for a good period. But after the volatility settled market bounced of a base price and surged higher. This provides good opportunity to invest and hold positions for long term.

What can happen this time?

Bitcoin has already surged past $580 mark and is trading over these levels. It has made a base around $465 and is gearing up to test the $600 level. While the price might fall steeply around August 22nd, during the time of the auction, it can prove out to be a very good investment opportunity to go past the $600 mark. It is expected that once the two year high is broken, there is a high chance that the market will continue to stay over these levels.

One thing that can be surely said is that this period has a lot of volatility in store and marking the right prices is very important for investing.