The U.S. Supreme Court refused to hear the Silk Road Bitcoin ownership case, meaning the U.S. government is free to dispose of 69,370 confiscated Bitcoins, and the market is worried that it may be sold and cause huge price fluctuations.

US court refuses to hear Silk Road seizure of Bitcoin ownership

The U.S. Supreme Court on Monday declined to hear a case concerning ownership of bitcoins seized from dark web marketplace Silk Road, meaning the U.S. government now appears to be able to sell them at will.

According to statistics, the US government has seized a total of 69,370 bitcoins (worth about $4.4 billion) in the Silk Road case. However, a company Battle Born Investments previously claimed that they had purchased the rights to these bitcoins through bankruptcy assets, and claimed that the debtor in the bankruptcy case, Raymond Ngan, was the mysterious "Mr. X" who stole a huge amount of bitcoins from Silk Road.

However, the US federal court did not agree that Ngan was "Mr. X" and ruled that Battle Born had no legal ownership of the bitcoins. Subsequently, the Federal Court of Appeal in San Francisco upheld the same ruling.

Now, the Supreme Court has also refused to hear Battle Born's appeal, which means that the case has come to an end and the US government can freely dispose of the funds, with the most likely outcome being a judicial auction.

The US government has recently transferred a large amount of Bitcoin

Judging from the on-chain data, the US government has recently frequently transferred a large amount of Bitcoin related to the Silk Road. In just two weeks in July and August this year, the US government transferred about $2.6 billion worth of Bitcoin to new wallet addresses, which is usually regarded as a precursor to preparation for sale.

However, since the U.S. Marshals Service has an asset custody agreement with Coinbase Prime, the exchange may just be helping the government to custody these assets. However, as governments around the world continue to sell off large amounts of confiscated cryptocurrencies, the market is concerned about the price volatility that may be caused. Will it cause a decline similar to the German government's sell-off?

Friends who are curious about the Bitcoin address of the US government can track it at any time through the Arkham platform. According to current data, the US government wallet holds the following coins:

203,000 Bitcoins (including Silk Road, Bitfinex hacking and other law enforcement results)

50,150 Ether ($ETH)

121 million Tether ($USDT)

Small amounts of $WBTC, $BNB, $BUSD, $USDC, and $AUSDC

The German cryptocurrency selling incident is still fresh in our memory. Will the big crash happen again?

Between June and July of this year, the German government continued to transfer hundreds of millions of dollars worth of Bitcoin. In addition, the bankrupt exchange Mt.Gox also announced the initiation of compensation procedures, so the market was quite panicked.

Affected by the panic selling, Bitcoin fell 15% between the end of June and the beginning of July, even falling below $53,000 at one point. Even German lawmakers called for an end to the sale of coins to avoid affecting the stability of the cryptocurrency market.

However, at present, the selling pressure from the German government, Mt.Gox, and miners selling coins, which caused panic in the market at that time, has been exaggerated. Before it is certain whether the US government will sell a large number of coins in one go, there seems to be no need to panic.

Whether the United States sells currency depends on subsequent policies?

It is worth noting that how the US government should deal with confiscated Bitcoin has become a topic of discussion in this US election. In July this year, Trump promised at the Bitcoin Conference 2024 that if elected, he would retain the Bitcoin currently held or acquired by the US government in the future.

That is to say, if Trump is finally elected, the US government may change the way it deals with seized Bitcoin, but the prerequisite is that Trump really fulfills his promise.

Should we sell it?

There are three things to say first. First, although the market fell when Dezi sold the coins, it still went up later. Moreover, the decline was not caused by Dezi's selling of coins alone. Second, with such a large selling pressure in Mentougou, the market fell, but it didn't fall much. It still went up later. Third, Grayscale has been selling, which has no impact on the market. Moreover, after the interest rate cut, Bitcoin has reached a new high this year.

Therefore, at the moment when liquidity is about to be loosened, it is not appropriate to choose to sell, especially if you bought at a relatively low position, because uncertain factors can cause the market to fall to a certain extent, and if you sell it, you will not be able to get back a good position. My average price is 40,000, so I will run to send it, otherwise I will not be able to receive it.

With the imminent release of funds and the strong inflow of ETFs, it is really not cost-effective to sell here. Although there are still some declines, it is really not much. You can just do a hedge.

As long as the general trend has not changed, we just need to remain patient and watch more and do less.

​