The US Department of Justice has been authorized to sell approximately 69,370 bitcoins confiscated more than a decade ago to Silk Road, a dark web platform headed by Ross Ulbricht. The value of this many BTCs is a total of USD 6.5 billion. Is this why the BTC price is falling?
Will the US sell bitcoins on Silk Road?
On December 30, a US federal judge ruled in favor of the Department of Justice’s request to sell BTC, which had been taken over by Silk Road many years ago. Battle Born Investments, which laid claim to these bitcoins, ultimately failed to delay the sale. The company’s lawyer criticized the authorities’ handling of the case, claiming that the department had used “procedural tricks” in the case.
What “tricks” are you talking about? The Department of Justice argued in court that the BTC rate is subject to considerable volatility, so the digital assets should be quickly liquidated (the case is similar to the one from Germany).
This all happens after the US Supreme Court refused to hear an appeal challenging the seizure of bitcoins filed by Battle Born (it did so in October last year). This decision likely paved the way for the U.S. government to sell cryptocurrencies, which at the time were estimated to be worth $4.4 billion. If everything goes through, it will be one of the largest sales of seized digital currencies in history.
Is this why the BTC rate is falling?
The news that the Department of Justice had authorized the sale of seized bitcoins put significant pressure on the market, with the bitcoin price dropping from around $95,000 to $93,800. Now the price for the king of cryptocurrencies is even less, USD 93,200.
Of course, the price fell not only because of the news from the US, there were also very good macroeconomic data, which, however, were not favorable for the market of risky assets, as they could reassure the Fed in its decision that interest rates should not be lowered quickly.
However, the news about the decision to sell BTC is controversial because Donald Trump, who will officially become the US president on January 20, promised during the election campaign that he would block all attempts to sell cryptocurrencies and create a bitcoin federal reserve based on these coins.
The first preparations for sale took place in December 2024, when as many as 10,00 BTC, which were under the supervision of the US authorities, were transferred to Coinbase. At that time, however, the market interpreted it as an attempt to secure these assets.
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