The U.S. Department of Justice (DOJ) has just gotten the green light from the federal judge to auction off the 69,370 Bitcoin seized from the infamous Silkroad Road case.
The total value of the Bitcoin confiscated is estimated to be around $6.5 billion based on today's market price.
Today, the U.S government holds a total of 198,000 BTC, worth around $18.5 billion, inclusive of those confiscated from the Silk Road case.
Analyst are speculating that with a little over a week before Donald Trump regains his title as the President of the United States, the outgoing Joe Biden administration might be desperate to to sell off all of the government-held Bitcoin to thwart Trump's plan of creating a Bitcoin reserve.
Fox Business Contributor, Jason Williams, is speculating that the Joe Biden administration is currently giving the DOJ orders to offload thousands of Bitcoin during a bull market, fully aware that it would cost Trump and his administration even more money to buy those Bitcoin back in the future.
Williams is calling this a blatant perversion of the government's fiduciary responsibility.
Since 2014, the U.S government has on multiple occasions, auctioned the Bitcoin it had seized from the Silk Road Case. Many of these are worth taking a closer look at.
In June 2014, The U.S government publicly auctioned Bitcoin seized by the Silk Road for the first time. The U.S. Marshals Service auctioned about 30,000 Bitcoins. The price of Bitcoin hardly moved after the auction, and it remained stable.
The second round of auctions of 50,000 Bitcoins occurred in December 2014. After the auction, the price of Bitcoin fluctuated $300-400, and did not plummet continuously.
In March 2015, 50,000 Bitcoins were shot again, and at this time, Bitcoins have rebounded from the previous low. The previous panic in the market further weakened, and the price quickly stabilized after a slight fluctuation between $280 adn $300.
Based on previous track records, the price of Bitcoin may experience a short-term price panic, but it won't have a lasting impact on the market.
Glassnode co-founders Jan Happel and Yann Allemann clarified how the U.S government handles Bitcoin sales. They noted that once the Bitcoin is forfeited, the DOJ transfers it to the U.S. Marshals Service, which manages sales through public auctions. These auctions are transparent and do not involve selling Bitcoin directly on cryptocurrency exchanges.
This is to avoid the sudden surge in supply, which might create a steep price drop. Auctions conversely minimizes these risks.
In order to maximize the gains they can get from the auctions, the U.S government might seize the first opportunity they can get to liquidate their holdings early.
For example, the government had sold a total of 195,092 BTC over the years, earning a total profit of $366.5 million from these auctions. But based on the current prices of BTC, the cumulative value of the Bitcoin sold would be worth an estimated of $18.25, $17.9 billion more than what it has previously earned.
This could also be one of the factors that is motivating the Biden administration to liquidate the Bitcoin from the Silk Road case so quickly.
Ross Ulbricht, founder of Silk Road, was granted a full pardon by President Trump after 11 years in prison. He expressed gratitude for his release and is now focused on reuniting with his family and rebuilding his life.
JoyStandard Chartered encouraged investors to buy Bitcoin during price dips, projecting it could reach $200,000 by 2025. The bank attributed recent market corrections to regulatory uncertainty but expects institutional investments to drive future growth.
AnaisDonald Trump granted a full pardon to Ross Ulbricht, the Silk Road founder, after over ten years in prison. The pardon was announced on 22 January, fulfilling Trump’s campaign promise.
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