Just recently, the U.S. Marshals Service has been officially approved to sell tens of thousands of bitcoins confiscated from Silk Road. Affected by this news, bitcoin fell from $64,000 to $61,000! The United States will sell about $4.4 billion in BTC, which will become the largest sale of seized bitcoins in history. It is more than the last time Germany sold 50,000 bitcoins! We know that last time Bitcoin fell to $52,000, and on August 5, due to Japan's interest rate hike, it directly fell below $50,000, reaching a low of $49,000!
Let's review the ins and outs of the incident. Silk Road, the former dark web giant, was destroyed by the US government in one fell swoop, and a large number of Bitcoins were confiscated. Among them, Battle Born Investments claimed in its appeal that it had obtained the rights to the 69,370 Bitcoins involved in the case through the bankruptcy estate involving Silk Road. However, on Monday, the Supreme Court decided not to hear the appeal of Battle Born Investments, a decision that actually supported the ruling of the United States District Court for the Northern District of California in 2022. Subsequently, the district court ruled that these Bitcoins could be liquidated.
According to the court ruling, the US government can sell 69,370 bitcoins worth $4.4 billion. This huge amount of bitcoin will be handled by the US Department of Security, and the specific method of sale has attracted much attention from the market. The US government has reportedly transferred a large part of its seized bitcoins, and according to blockchain tracking agency Arkham, $2 billion and $593.5 million of BTC were transferred in late July and mid-August, respectively. All signs indicate that Coinbase Prime will serve as the custodian of Bitcoin, given that the company has signed a custody agreement with the USMS.
The news has undoubtedly caused a stir in the cryptocurrency market. Investors are speculating on what impact the U.S. government's sell-off will have on Bitcoin prices. Some analysts believe that the sudden influx of Bitcoin may cause a supply shock, which may limit Bitcoin's price increase. However, there are also views that if the sell-off is conducted over-the-counter (OTC) or lasts for a longer period of time, the market impact may be reduced.
In fact, the price of Bitcoin did fluctuate after the news was released. According to market data, BTC once exceeded $61,000, but then fell back, with a 24-hour drop of 1.96%. This fully illustrates the market's sensitivity and uncertainty to this event.
Political considerations
In addition to market factors, we also need to consider some political factors. Some observers have linked the expected sale to the upcoming election in a few weeks. Economist Peter Schiff believes that Trump's remarks may have prompted the current Biden administration to take quick action to sell. Schiff criticized Trump for revealing plans to suspend government Bitcoin sales before taking office, and said that this statement may have accelerated the government's actions. In addition, financial lawyer Scott Johnsson also foresaw these potential sell-offs and pointed out that multiple transfers of funds to escrow addresses may be preparations for political motives.
The US's upcoming sale of approximately $4.4 billion in BTC will undoubtedly have a significant impact on the cryptocurrency market. Whether it is market price fluctuations or political considerations, we should remain cautiously optimistic. In this market full of variables, only continuous learning and adaptation can keep us invincible. Let's wait and see how this historic sell-off will play out!
