The U.S. government has seized 69,370 Bitcoins worth $6.7 billion from popular darknet marketplace Silk Road after the U.S. Department of Justice (DoJ) approved Battle Born Investments’ long-standing BTC claims dispute. This has led investors to question whether BTC prices will fall below $90,000 again, as the asset fell below $93,000 earlier today.
US Government Liquidates Silk Road Bitcoins Based on DOJ Authorization
As DB News previously reported, the U.S. Department of Justice approved the government to sell 69,370 bitcoins seized from the Silk Road dark web. The Department of Justice allowed the U.S. government to liquidate these assets on the grounds of bitcoin price volatility.
According to data from Arkham Intelligence, hours after the report was published, the balance in the U.S. government wallet dropped from $6.7 billion on January 8 to zero.
Interestingly, this sell-off occurred ten days before Donald Trump took office on January 20. While the Trump team was considering establishing a strategic Bitcoin reserve, the Biden administration hurriedly decided to liquidate Bitcoin.
Interestingly, this decision by the federal judge was made shortly after the new government took office two weeks ago. This ruling was made on December 30, following a long-standing ownership dispute with Battle Born Investments. The investment firm failed to secure ownership of BTC through bankruptcy assets.
Battle Born's legal team strongly criticized this decision, with their lawyers describing it as 'another egregious example of the Department of Justice abusing civil asset forfeiture procedures.' They believe the government employed 'procedural deception to ensure the facts would never be heard.'
Is the BTC price about to pull back below $90,000?
After being blocked at the $100,000 mark, Bitcoin prices faced strong selling pressure, erasing all weekly gains. At the time of writing, BTC is down 2.47% to $93,915.9, with a market cap of $1.86 trillion.
Moreover, due to a significant decline in Bitcoin funding rates, BTC prices have not shown any strength in the derivatives market. CryptoQuant analyst ShayanBTC noted:
“In the recent Bitcoin rally, funding rates experienced a significant spike midway through the upward trend, indicating a delay in demand inflow. However, after Bitcoin encountered resistance at $108,000, funding rates dropped significantly.”
On the other hand, short-term traders are turning to exchanges at a loss, which seems to be a panic sell-off. According to on-chain data, short-term holders have recently transferred 23,200 tokens to exchanges at a loss.
High-level leaders remain optimistic.
However, well-known leaders like Robert Kiyosaki remain bullish on BTC. He wrote:
“Bitcoin crash. Good news. I continue to buy Bitcoin because a Bitcoin crash means Bitcoin is on sale. Remember to 'buy low... and hold'. There are less than 2 million Bitcoins left to mine.”
Historically, January after a halving has always been volatile for Bitcoin. On the other hand, former BitMEX CEO Arthur Hayes predicts that $612 billion in liquidity will be injected in the first quarter of 2025, which will cause Bitcoin to reach new highs.
Salvadoran President Nayib Bukele hinted that as the U.S. government sells off Bitcoin, El Salvador will add more Bitcoin to its portfolio. He said, 'Maybe we all have a chance to buy Bitcoin at a discount!'
