NEW YORK (InsideBitcoins) — By May of 2014, even though China had backed down from its ban on bitcoin, there were still continued problems in the country. BTC China stopped deposits from the Bank of China. The Global Bitcoin Summit was missing the CEOs of the five major Chinese bitcoin exchanges. And there was continued turbulence in the price.
But in the U.S., things were finally looking brighter for bitcoin. The Federal Election Commission announced that political candidates could accept the digital currency as a donation. Congressman Jared Polis was the first elected official to accept the currency during his reelection campaign.
VC heats up and the FAC calls bitcoin a boon
Venture capital really started to heat up during the month, as BitPay raised a $30 million series-A round — the largest sum of money any single bitcoin company had ever raised to this point.
The Federal Advisory Council (FAC), comprised of representatives from each of the 12 districts of the Federal Reserve, said that bitcoin could be a boon for global commerce. In its May minutes, it said:
“[Bitcoin’s] global transmissibility opens new markets to merchants and service providers. Driving capital flows from the developed to the developing world should increase consumption.”
It also explained why bitcoin was not as big a part of the black market as many had thought. “Sizing estimates for the world’s black markets reach into the trillions of dollars. At this stage, the total value of Bitcoin is approximately $6 billion, a sum that is dwarfed by other forms of payment, whether illicit or not.”
Bitcoin bots Willy and Markus
Willy and Markus also reared their ugly heads in May. According to an anonymous report published on the blogging platform WordPress, two trading bots, named Willy and Markus, artificially inflated the price of bitcoin up to $1,000 during the big run up in November and December of 2013. Many suggested the bots were the only reason the price rose as high as it did.
To make matters worse, the trading algorithms were linked to the notorious Mt. Gox exchange. Conspiracy theorists reveled in the fact that the total amount of bitcoin bought by the two bots was 650,000 — the exact same amount that Mt. Gox lost.
However, there is no hard evidence to support the claim. After Mt. Gox went down, Willy continued to trade. No other person attached to Mt. Gox — via the site or API — could trade, yet this bot was moving freely. It was certainly suspicious.
Big plays before the end of the half
The month of May ended, fortunately, on some good news. DISH announced on May 29th that it would begin accepting bitcoin as payment. It would take another few months for someone to finally pay with bitcoin, but DISH quickly became the largest company in the world to accept the cryptocurrency.
Then came June. And things calmed down a bit, at least from a bad news perspective. But there were more positive developments:
- The amount of VC money invested in bitcoin companies passed $200 million by mid year, surpassing all of the bitcoin investments for the full year of 2013.
- Expedia announced on June 11 that it would begin accepting bitcoin on its website. The travel company partnered with Coinbase on the initiative. A couple of months later, Expedia admitted that it was doing better even than expected with bitcoin payments.
- And the major event of the month was the first sale of bitcoin by the U.S. Marshals. When Silk Road was taken down, the government seized not only the 26,000 bitcoin attached to Silk Road, but also another 133,000 that belonged to Ross Ulbricht. The government, not wanting to hold onto the currency, looked to liquidate. And the first auction was held on June 27th. The first lot of bitcoin sold was 30,000 BTC. It was reported in July that Tim Draper, a venture capitalist in California, had won the auction for the entire lot. Other people had participated in the auction, but Draper outbid them all — at the time, a stash valued at close to $18 million.
Read the entire Inside Bitcoins 2014 retrospective:
Bitcoin 2014: Growing Adoption, High Profile Arrests and a Bewildering Price
Bitcoin 2014: Bitcoin’s Biggest Nightmare, the Collapse of Mt. Gox
Bitcoin 2014: Continued Theft Tests the Cryptocurrency’s Credibility and Governments Step In
Bitcoin 2014: The Big Money Makes its Move
Bitcoin 2014: Malware, Mobile Payments and Political Maneuvers
Bitcoin 2014: Bitcoin’s Most Trying Year Comes to a Close