U.S. to Auction $17.4M Worth of Seized Bitcoin

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June 25 (Bloomberg) –- SecondMarket CEO & Founder Barry Silbert and Bloomberg’s Matt Miller discuss the auction by the U.S. government of over $17M worth of Bitcoin seized after shutting down the Silk Road marketplace last year. They speak to Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Welcome back to "street smart." this friday, the u.s. government will be selling bitcoins.

Buyers from wall street to silicon valley are lining up to bid on a cashe of bitcoins worth $7.4 million -- worth $17 million.

There is a product which allows you to participate.

I am joined by second market's barry silbert, along with our bloomberg bitcoin guru.

How do you like that title?

I am not really a guru.

You are an enthusiast.

Matt miller.

I think you are there.

Walk us through what is actually going to happen.

The feds are auctioning off bitcoin, which in itself is a bit of a stamp of approval, if you would.

How are you going to participate?

A lot of a stamp of approval.

You could just throw it away.

On friday, they are doing an auction.

Anybody who puts down a $200,000 deposit can bid on 3000 bitcoin blocks, worth a million and a half dollars.

We are going to get all the bits from our customers and put it into the auction, so people can bid at lower dollar amounts.

It is kind of weird how the u.s. marshals have done this.

They have a lot more bitcoins.

This is the first block.

They have over $100 million of bitcoins.

They're auctioning in blocks of 3000. smart, because they do not want one person to get all of it and be able to move the market easily.

On the other hand, there are very few people who can go out and drop $1.5 million.

That is why it is good to have a syndicate.

And u.s. bank accounts, which eliminates a lot of foreign investors.

And bitcoin users.

We put a syndicate together and said we are collecting bids until noon tomorrow.

Could i put five dollars in, or is there a minimum?

$25,000. $25 is not going to do it.

Western union will not move bitcoin until a reserve bank issues it, but the u.s. marshals office is willing to sell it to stop so, you heard.

The ceo of western union was just on the show and said he would be interested in looking at bitcoin, but only at the point where it was a currency and he could move it around the world as a currency, like anything else.

He could now.

You argue that it is.

We were listening to the interview.

He said it is difficult to transfer money across borders.

That is not true.

Not only is it easy, but it is free.

I do not know what they charge.

A lot of money.

That interview was very reminiscent of kodak in the mid-1990's. digital photography comes out.

No one is going to use it.

All of a southern, codec becomes a web company.

I think western union is running the risk of not embracing digital currency.

If it is not bitcoin -- look at the mobile platform.

Apple is trying to get in this business.

Paypal is already there.

Why would you use western union if you could use paypal at a fraction of the cost?

Fax or bitcoin.

David marcus has long -- admittedly, is himself long bitcoin.

The ceo of ebay was saying, we would consider that.

Clearly, facebook has plans to get involved in the payment space.

You combine david marcus and facebook, it will be interesting to see how he monetizes these mobile labs.

Is it ok if i jump in?

Absolutely.

Bitcoin investment -- i wonder how that is going.

Last year, you could not tell me who the investors were.

Basically fun running the fact that -- who are basically getting ahead of the trend where real banks, real players in the financial markets, are going to start transacting in bitcoin.

We are seeing family offices move into the family investment trust.

Some of the most well-known entrepreneurs running the largest companies are investing in the trusts.

Mark andreessen, obviously.

These are people running the companies that change people's lives.

On the wall street funds, i cannot tell you how many days of the week i am doing speaking, meet ups with global banks, and it is going to happen.

We are kind of at the inflection point.

We are going to see some movement into the space.

The regulatory risk is no longer there.

Basically, the price has been on the decline for six months.

It is starting to turn back up.

That might be the catalyst.

He founded second market.

There are reports you will be ceding the post to focus on bitcoin-related work.

We are spinning our bitcoin activities into another company.

I will become chairman and ceo of the new company, so i can focus on my new passion, and that is bitcoin.

Why are you so passionate about it?

It does not sound like you are there yet.

I think matt could agree -- it is like why you are passionate about the internet in the late 1980's. it could change the way people think about money, the way they send money, the way they hold money.

It can change lives in places like africa and india, and here in the u.s. early days of the internet, you could never imagine the things that would emerge.

Aren't people always going to be transferring bitcoin into dollars in their head, or into some kind of reserve currency?

To really understand what a bitcoin is worth, you have to have a dollar value behind it.

Something is worth what someone is willing to pay for it.

If you look at gold, it has a few thousand years of history of being a store of value, but not much use.

Bitcoin has a lot of similarities.

A finite supply.

Cannot be counterfeit.

You can now buy a cup of coffee, a car, a house.

And you remove the trust.

If you do not feel like putting your trust in janet yellen or mario draghi, you can use bitcoin.

I am not saying i do not trust them.

Why wouldn't i? it is not like they are going to print the currency as much as they can to try to drive down the value.

The average, in 27 years, a government well destroyed a currency.

If you live in argentina, thailand, many places around the world -- it might be popular in

This text has been automatically generated. It may not be 100% accurate.

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