The U.S. government is preparing to sell 69,370 Bitcoins, valued at over $6.5 billion, following a Supreme Court ruling that ends a prolonged legal battle over the ownership of these assets.
The sale, which is expected to be one of the largest crypto liquidations in history, could exert substantial selling pressure on the Bitcoin market.
Legal Background
These Bitcoins were seized from the Silk Road darknet marketplace after its shutdown in 2013. The stash was tied to a wallet controlled by an individual known as “Individual X.”
After years of litigation, the U.S. District Court ruled in 2022 that the Bitcoins were subject to government forfeiture, a decision upheld by the Ninth Circuit Court of Appeals in 2023.
Following the Supreme Court’s denial of an appeal in October 2024, the path was cleared for the government to liquidate the assets.
Bitcoin Prices Under Pressure
The announcement of the sale has raised concerns among traders about the potential downward pressure on Bitcoin’s price.
In October 2024, Bitcoin saw a 2% drop when the Supreme Court declined to hear the appeal, and the broader market followed suit.
Currently, Bitcoin is trading at $93,912, with a 1.65% decrease in the last 24 hours. Analysts worry that the influx of over $6 billion worth of Bitcoin could lead to significant short- and long-term volatility.
Political Context
The timing of the sale adds complexity to the political landscape, with President-elect Donald Trump, a Bitcoin advocate, preparing to take office.
Trump has previously proposed the idea of a national Bitcoin reserve and encouraged Bitcoin holders to retain their assets.
However, the DOJ’s decision to sell the seized Bitcoins could face criticism from those who support Trump’s vision of Bitcoin as a strategic asset.