The U.S. Department of Justice has received approval to liquidate 69,370 Bitcoin (worth ~$6.5 billion) seized in the infamous Silk Road case. This move could temporarily affect Bitcoin's price, but historical trends suggest limited long-term impact.
Key Details of the Liquidation
- Asset Origin: Confiscated from Silk Road, a darknet marketplace shut down in 2013.
- Current Holdings: 69,370 BTC (valued at ~$6.5 billion) from the "bc1qa5" wallet.
- Market Reaction: Bitcoin dropped 2.5% after the announcement, stabilizing at $94,400.
Why Is the U.S. Government Selling Now?
The DOJ cited Bitcoin price volatility as the reason for seeking liquidation approval. Past sales (2014–2015) were conducted via OTC auctions, minimizing market disruption.
Silk Road: A Bitcoin Milestone
- Founder: Ross Ulbricht ("Dread Pirate Roberts"), sentenced to life in 2015.
- Platform Scope: Facilitated illegal trades (drugs, weapons) using Bitcoin for anonymity.
- Initial Seizure: FBI confiscated 170,000 BTC—the largest at the time.
Past U.S. Bitcoin Sales & Market Impact
| Year | BTC Sold | Outcome |
|---|---|---|
| 2014 | 30,000 | No major price crash; stabilized |
| 2014 | 50,000 | Prices held steady (~$300–$400) |
| 2015 | 50,000 | Brief dip, quick recovery |
Key Takeaway: Auctions attracted institutional interest, reinforcing Bitcoin’s legitimacy.
Could Trump’s Policies Delay the Sale?
- Campaign Promise: Trump vowed to commute Ulbricht’s sentence if elected.
- Bitcoin Reserve Pledge: Trump supports making the U.S. a crypto hub, potentially halting sales.
- Market Speculation: 73% odds (per PolyMarket) Ulbricht gets pardoned, possibly sparing the BTC.
U.S. Government’s Bitcoin Holdings
- Total: 207,189 BTC (~$19.5 billion), per Bitcoin Treasuries.
- Percentage: 0.987% of circulating supply.
FAQs
Q: Will this sale crash Bitcoin’s price?
A: Short-term volatility likely, but past OTC auctions avoided major dumps.
Q: How much Bitcoin does the U.S. still hold?
A: ~207,000 BTC—most from criminal seizures.
Q: Could Trump stop the sale?
A: If Ulbricht is pardoned, these BTC might remain untouched.
Q: What’s Silk Road’s legacy?
A: Proved Bitcoin’s use in anonymous transactions, prompting regulatory scrutiny.
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Bottom Line: While the sale introduces uncertainty, Bitcoin’s resilience—and potential political interventions—may soften the blow.