On January 9, 2025, crypto news reported that the United States government has been authorized to liquidate 69,000 BTC worth approximately $6.5 billion. These Bitcoin holdings were seized from the infamous Silk Road darknet marketplace.
An official confirmed that a federal judge had ruled on December 30, allowing the Department of Justice (DoJ) to proceed with the sale of the seized Bitcoin.
No Need to Panic
According to Arkham Intelligence, a sharp drop in BTC holdings from the associated address (bc1qa) was observed on January 8, bringing the balance to zero. However, there was no confirmation of large-scale liquidations, as the latest transaction from the address was for a mere $0.51 worth of BTC.
Interestingly, Blockchain.com’s explorer still reports the balance as unchanged at 69,370 BTC, suggesting no substantial movement of funds.
Several industry experts believe there’s no reason to panic. Crypto influencer @trading_axe suggested that the seized Bitcoin may have already been sold under previous administrations. He speculated that the distribution was kept quiet to avoid political fallout.
Similarly, crypto commentator MartyParty assured followers, “It’s already happened. No need to spread fear.”
Market Absorption Capacity
Ki Young Ju, the CEO of CryptoQuant, highlighted that last year, the market absorbed approximately $1 billion daily, based on realized cap data. He reassured investors, stating, “The U.S. government selling $6.5 billion could be absorbed in just a week. Do not panic.”
Bitcoin Price Reaction
Bitcoin prices have shown no immediate reaction to this news. The asset, however, has been gradually pulling back since briefly reclaiming six-figure levels on January 7.
At the time of writing, BTC is trading at $94,050, down 2% for the day, with an intraday low of $92,500. The asset remains within its rangebound channel, consolidating since mid-November. However, a drop below the $90,000 support level could trigger panic selling.
Key Takeaway
While the news of potential liquidation sounds alarming, market experts suggest that the impact may be minimal, given the current liquidity and capacity of the crypto markets. Investors are advised to avoid fear-driven decisions and monitor developments closely.
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