In recent days, many brothers have begun to panic, saying that the 69,370 Bitcoins seized from the Silk Road have been approved for sale, and BTC may plummet. In response, I will analyze the future impact of this event on the BTC market from the perspective of on-chain data because news can create panic, but data does not lie.


To conclude: There will be a drop, but it has not reached a panic level. Last year, based on the realized market value, 379 billion USD flowed into the market, about 1 billion USD per day. Even if the U.S. government’s 6.5 billion USD (Bitcoin) is absorbed within a week, there is no need to panic.


First point: Currently, all Silk Road BTC addresses have not changed. From on-chain data, it is clear that this address has not moved a bit since October 2022. Although it cannot be ruled out that it may sell, the likelihood of it selling all at once this time is very low. So there is no need for everyone to worry too much about this.




Moreover, there was also a historical instance where the German government sold 50,000 BTC. Although this caused about a 15% drop in the market at the time (BTC fell from 65,000 to a maximum of 55,000), within less than a month, the BTC price returned to the 65,000 position.


Second point: The current price of BTC

In fact, looking back at the current BTC price, we can see that the price has dropped from a recent high of 108,000 to a low of 92,000, with a maximum drop exceeding 14%. This is also the largest drop in the last three months. Therefore, regardless of whether the Silk Road BTC is to be sold or not, the market's expectation of a drop has already emerged in advance, and the news regarding the Silk Road has been largely digested.


Third: Short-term holders' performance

From on-chain data, it is not difficult to see that short-term holders transferring BTC to exchanges have mostly sold below their cost price since January 8. Moreover, the Spent Output Profit Ratio (SOPR) is also below 1, indicating that the BTC sold in this drop is mostly below cost, while the true long-term holders have not sold their assets, so there is no need to worry too much about this.


The selling pressure of the fourth Silk Road

From the beginning of 2024 to now, the actual market value of BTC has increased by more than 381.7 billion USD, while the selling pressure from the Silk Road amounts to only 6.5 billion USD. This is really too small in terms of the overall BTC market value; time will tell you the answer. In the long run, the impact of this selling pressure will be very small!


This news broke less than two weeks after Trump's new administration officially took office, and Trump had vowed at last year's Bitcoin conference not to let the U.S. government sell any Bitcoin, promising to classify Bitcoin as a strategic reserve asset for the United States.


But this judgment alone does not guarantee immediate liquidation, as the U.S. federal asset forfeiture involves multiple administrative steps and potential appeal windows. It is expected that the U.S. government will take months to begin liquidating the BTC seized from the Silk Road.


And according to on-chain data, it has also been quickly consumed, which may be an opportunity for some to pick up the bargains.

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