The General Services Administration is rethinking the way it auctions off government property with the introduction of cryptocurrency assets.

To securely hold bitcoin and other digital currencies, GSA had to develop a digital wallet where it could receive assets and transfer them to winning bidders. The agency has since auctioned off more than 25 bitcoin and 150 litecoin with a total estimated value of over $1 million.

In GSA’s most recent auction, bidders vied for 11 lots of cryptocurrency — 8.93 bitcoin and 150.2 litecoin — with an estimated value of $377,000. It’s the fourth auction this year to feature cryptocurrency, and the first to list litecoin.

“It’s fair to assume that we will have many different types of cryptocurrencies being routed through GSA auctions itself, with our success on bitcoin and litecoin,” Thomas Meiron, GSA’s Federal Acquisition Service’s Southeast Sunbelt regional commissioner, said on Federal Drive with Tom Temin. “As different forms of cryptocurrency increase in use — in value — we will ultimately see more of those that will make their way into the GSA auctions program.”

Unlike auctions for physical assets, which last anywhere from 7 to 10 days, auctions for digital assets last three days maximum due to the volatile nature of cryptocurrency markets. But GSA will extend the deadline if there’s a bidding frenzy toward the end.

Auctioneers must also possess a digital wallet, and can only make payments for the cryptocurrency through wire transfers.

“We need to track the payments into us, to clear through the Treasury, before we go ahead and transfer the asset back through the digital wall to the winning bidder,” Meiron said. “There really is a cradle-to-grave, almost a handhold of this cryptocurrency asset from the government’s hold to the winning bidder themselves.”

GSA auctions normally contain surplus property from other agencies, including construction equipment, vehicles, boats, aircraft parts and other high value items obtained from law enforcement seizures. The proceeds are then returned back into the Treasury.

In 2020, for example, GSA auctioned off over 60,000 individual line items of surplus property.

The first cryptocurrency auction, held in March, had three quarters of a bitcoin sell for 20% over market value at the time, Meiron said. The largest auction came in April, when GSA sold 9.45 bitcoin with an estimated market value of more than $520,000.

GSA isn’t the first agency to auction off cryptocurrency, though. The U.S. Marshals Service has auctioned off bitcoin since 2014, due in part to the FBI’s seizure of more than 140,000 bitcoin on the digital black market Silk Road.

The source of GSA’s cryptocurrency, meanwhile, remains unknown. But generally, GSA obtains property through seizures, surpluses or even foreign gifts.

GSA’s next cryptocurrency auction is set to feature one lot of litecoin. Bidding will run from July 17 to July 19.

“We will probably see this is a new increase in the market coming very soon,” Meiron said.

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