Bitcoin news round-up 07.07.2014

3 minute read

Posted by: DeepDotWeb

July 7, 2014

Bitcoin continued on its upward trajectory over the past week, rising to $631.48 at the time of writing, up from $598.97 at the start of the week, June 30. Having recovered from some dropback the week prior, the coin is once again comfortably above the $600 threshold; values of which it hasn’t seen since the start of June. Price rises were spurred by positive industry news as well as the successful US federal auction of coins seized from the illicit Silk Road marketplace.

Policy news

All eyes were on the US federal bitcoin auction this week, as the government sold off 30,000 of the bitcoins it had seized from the Silk Road black market. All coins went to a single bidder, revealed as venture capitalist Tim Draper. Draper outbid 10 other parties for the coins . Details of pricing were not announced, though at the time of the sale the chunk of coins were worth $18 million. Draper said he will use the bitcoins to provide liquidity in emerging markets. In addition, a leak of the potential bidders came by email from the US Marshalls Service, revealing potential bidders. Ironically, Draper was not on that list.

An independent Scotland could trial bitcoin use after the referendum to leave the UK later this year, the Assistant Governor of the Reserve Bank of Australia Guy Debelle said earlier this week. “Short a currency” post-independence, the country could act as a “cryptocurrency test bed”, Debelle suggested. Debelle argued use of bitcoin would be similar to the Scotland’s previous period of free banking it experience in the 18th and 19th centuries. “Those guys have a bit of experience with competing currencies back in the 18th and 19th centuries. So I suppose one possibility is, if the vote for independence actually gets up, they’re going to be short a currency,” Debelle said. However, he did warn that the system fell apart previously.

Russia is apparently still considering what stance to adopt with bitcoin, though said this week the currency “should not be rejected”. The country’s central bank said it will not hamper the use of the currency, back-tracking on its previous vow to crack down on the electronic payment instrument. Bank of Russia Deputy Chairman Georgy Luntovsky said there is as yet no evidence the coin has been used to buy guns or drugs in the country, and that the bank will watch how the situation develops before taking action. Russian authorities remain fearful that the coin could be used for money laundering and other criminal activities, however.

Industry news

Reddit user TheDJFC, who previously accidentally sent 800 bitcoins, worth some $500,000, to a defunct Mt. Gox address has now recovered them. After posting about the mistake – which saw him copy and paste the wrong address whilst transferring coins – Reddit users suggested he contact a lawyer and then get in touch with the bankruptcy trustee handling Mt. Gox’s case . Reddit users joked that TheDJFC, after revealing he had recovered the coins, has been “un-goxxed” . TheDJFC did not originally start the Reddit thread, titled “remember the 800 btc fuckup guy”, but commented to verify he had received the bitcoins after another user saw they had been moved from the Mt. Gox wallet.

Washington-based travel website Expedia, after opening up to bitcoin in June, has said bookings made via the currency have already exceeded its expectations and hailed the move a success. Although the company declined to release information on sales made using the coins, Vice President Michael Gulmann stated the company is serious about integrating use of the currency.

A new Hong Kong-based bitcoin exchange has opened, promising to offer unprecedented transparency mechanisms such as proof-of-reserve tests as a way of giving customers greater trust in their exchanges and preventing another Mt. Gox incident . The exchange, Coinport, already received seed funding from IDG Capital Partners in December last year.

Litecoin, the apparent silver to bitcoin’s gold, has begun “decoupling” from the currency and moving away from following the same peaks and troughs in pricing. After hitting $40 around the time bitcoin rose to $1,000 last year, some from the industry are now speculating that money is being taken out of litecoin and pumped into bitcoin – which will further strengthen bitcoin’s place in the market. Although bitcoin began recovering from its price slump in April, litecoin has continued to suffer and is still trading around the $10 mark. Dogecoin has yet to follow the pricing trends of either currency, and is still worth less than $0.01.

Updated: 2014-07-07