(Bloomberg) -- Riot Blockchain Inc. won 500 Bitcoins in an auction of property seized by the U.S. Marshals Service, a bet that the digital currency’s breath-taking run isn’t over.
Riot, which invests in cryptocurrency and blockchain startups, sought many more of the 3,813 Bitcoins in the auction Monday but was outbid, Chief Executive Officer John O’Rourke said in a phone interview. The company acquired the Bitcoins at about the market price at the time, he said. That works out to about $5.2 million, based on Monday’s closing price of $10,354.
“I believe we’ll be heading north of $50,000 market price within the next 12 to 18 months,” O’Rourke said. “Our strategy at Riot is to accumulate Bitcoin and to provide our investors as much direct exposure as we can, hence we decided to participate in the auction.”
The auction, the sixth by the Department of Justice, attracted 62 registered bidders and received 111 bids, the Marshals Service said Tuesday in a statement. The agency doesn’t announce names of auction winners or the total amount raised.
The auction represented a rare opportunity for investors to purchase a large amount of Bitcoins outside of online exchanges, allowing large purchases without driving up the price. The last such auction took place in August 2016, when the agency offered 2,700 Bitcoins, forfeited in 12 cases. The largest number of Bitcoins the agency ever auctioned off was 50,000 in December of 2014. Back then, one Bitcoin cost about $373, so the whole hoard had a market value of less than $19 million.
Venture capitalist Tim Draper, who had said he was considering participating in Monday’s auction, was the sole winner of about 30,000 Bitcoins in a 2014 sale. SecondMarket, now part of Nasdaq, won a large swath of Bitcoins in a previous auction as well.
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