Bitcoin's Price Surged Following Silk Road Auction
The price of bitcoin surged following the successful auction of 30,000 coins seized following the shutting down of Silk Road last year.Reuters

A heightened interest in bitcoin after the auction of 30,000 coins seized from Silk Road has led the price of the cryptocurrency to spike.

The price of a single bitcoin has risen by more than $50 in the last 24 hours, having opened at under $600 on Monday to its current price of $653 on CoinDesk's price tracker.

The reason for the sharp increase in the price of the world's largest cryptocurrency is a renewed interest in bitcoin from investors following the successful auction of almost 30,000 coins seized by the US government when the underground drugs marketplace Silk Road was taken offline last year.

The winning bidders in the auction were being informed on Monday by the US Marshals Service, which said that 45 registered bidders had taken part and 63 total bids were received for the bitcoins.

It would not however reveal the bidding price of the bitcoins adding: "The award process is ongoing, and we will have no further announcements today."

The value of the bitcoins during the auction on Friday hovered around $580, making the total 29,655 coins worth around $17.2 million.

Tremendous demand

Speaking to cryptocurrency news website CoinDesk, Dan Moorehead, CEO of Pantera Capital, said the auction has succeeded at creating greater awareness of his company's investment products:

"Says Law states that 'Supply creates its own demand'. So true when it's the US government auctioning bitcoins. The publicity created a tremendous amount of demand. We had several large new players bid."

On Twitter, the CEO of luxury bitcoin marketplace BitPremier, Alan Silbert concurred with Moorehead's appraisal of the situation, saying that those investors who were not successful in the auction would still be looking to get involved with bitcoin investment:

The US Marshals service tried to keep the identities of the bidders secret ahead of the auction, but one of the most public groups was SecondMarket, which is run by Alan Silbert's brother Barry.

SecondMarket had positioned itself as a syndicate which would allow smaller investors to take part in the auction by lowering the upfront costs and bid sizes.

However it appears as if the effort was unsuccessful, with Silbert announcing on Twitter that the syndicate had not been awarded any bitcoin in the auction.

Many see the lack of success for SecondMarket as a positive for bitcoin, believing that it shows a strong interest from other institutional investors.