The cryptocurrency community is abuzz with rumors that the U.S. Department of Justice (DOJ) has been granted permission to sell 69,000 Bitcoins [BTC], valued at $6.5 billion, confiscated from Silk Road.
The news first surfaced through a report by media outlet DB News, citing an unnamed U.S. official.
A recent post on X (formerly Twitter) dated January 9th, shared by the publisher, revealed,
“The U.S. Government has been given the green light to liquidate 69,000 BTC ($6.5 billion) from Silk Road, as confirmed by an official source to DB News today. This development is quite intriguing, especially with the new administration’s stance on not selling off these assets.”
What Lies Ahead for the U.S. Bitcoin Strategic Reserve?
The sentiment in the market is always impacted whenever news about the U.S. government’s handling of BTC emerges.
Considering President-elect Donald Trump’s commitment to establishing a U.S. Bitcoin Strategic Reserve (SBR) utilizing the aforementioned seized Bitcoins, any potential actions are under intense scrutiny by investors.
There have been speculations within the community suggesting that the confiscated BTC may have been already liquidated through a ‘credit line.’ One user alleged,
“The ‘seized BTC’ intended for a ‘strategic reserve’ under the Trump administration has allegedly already been sold off with the assistance of a credit line facilitated by Coinbase.”
Some individuals dismissed the news as FUD (Fear, Uncertainty, Doubt). In fact, data from Arkham revealed no decrease in the balances of wallets associated with the seized BTC until the present moment.
Should this news hold true, the sale could transpire prior to Trump’s official inauguration. Several market analysts believe that even in such a scenario, the impact on BTC might not be significant.
The founders of Glassnode clarified that any potential sale would occur through OTC (over-the-counter) markets rather than exchanges, hence not exerting substantial pressure on the dominant cryptocurrency.
CryptoQuant’s founder, Ki Young Ju, downplayed fears of a market crash, asserting that the envisaged $6.5 billion sell-off could be absorbed smoothly by the market. He remarked,
“Last year, the market saw an influx of $379 billion based on the realized cap, averaging at around $1 billion daily. Therefore, the U.S. government’s sale of $6.5 billion could potentially be assimilated within a week. Investors need not panic.”
Despite these assessments, prediction platforms like Polymarket and Kalshi have set the odds of a U.S. Bitcoin strategic reserve materializing by 2025 at over 40%. However, the likelihood of this occurring within the first 100 days of the incoming administration has decreased from 34% to 27% as of now.