The United States government is auctioning off nearly 30,000 bitcoins on Friday. Wait, what?

The bitcoins — which are worth $17,438,618 at current BTC exchange rates — were seized by the U.S. Marshals Service during the investigation and subsequent shutdown of the online drug market Silk Road.

A total of 29,656.51 BTC are up for auction, divided into nine blocks of 3,000 BTC and one block of 2,656.51 BTC. The auction will run online until 6 p.m. ET today, June 27, 2014.

Although the auction is taking place online, this isn't like eBay. Not just anyone can bid on the Bitcoin cache. Instead, eligible bidders had to register with the Marshals Service in advance, along with a $200,000 deposit.

The identity of the eligible bidders is supposed to be anonymous, but the Marshals Service accidentally leaked the list of interested parties last week. Companies bidding for volumes of BTC include SecondMarket, the Bitcoin Investment Trust, Pantera Capital and Binary Financial.

Once the auction is complete, the bitcoins will be transferred to private parties. As with all things Bitcoin, the changes will be seen on the block chain, the public ledger of every Bitcoin transaction. The Marshals Service has said it isn't certain whether it will release information about the winning bidders.

How will this impact Bitcoin prices?

CitiFX, a division of Citi, released an investment note looking at the greater impact the Bitcoin auction will have on the cryptocurrency's price.

The note, according to Coindesk, the report reads in part:

"Pumping such a large quantity into the market should weigh on prices. The terms of the auction make it difficult for small bidders ($200k deposit, each of the nine blocks valued around $1.8m), so the downward pressure is probably exacerbated by the limited number of investors interested in and capable of bidding."

The note also mentions that the Marshals Service is auctioning only 20% of the full Silk Road cache of bitcoins. That means more auctions are likely to follow, and that could have an impact on price, too.

Citi is already attributing some of the 10% price drop in Bitcoin since June 11 to the auction. Whether Bitcoin prices go down further after the auction remains to be seen.