The US govt has disposed of a whooping 69,370 Bitcoins, whose worth is estimated at $6.7 billion, captured from the famous darknet marketplace Silk Road. This is a result of the US Department of Justice (DOJ) clearing the extended debate of BTC claims by Battle Born Investments.
This has caused investors to question if another BTC price crash under $90,000 is coming in the near future as the asset took a dip under $93k earlier on December 9. A crypto news provider, DB News has reported that the US DOJ agreed with the government to sell 69,370 Bitcoins captured from the Silk Road darknet.
The DOJ quoted Bitcoin price fluctuation as the reason for permitting the US govt to liquidate the assets.
What does the data reveal?
Hours after reports emerged, the balance in the U.S. government’s cryptocurrency wallet dropped to zero from $6.7 billion on January 8, according to data from Arkham Intelligence. Notably, this selloff occurred just 10 days before Donald Trump assumed the presidency on January 20. While the Trump administration considered building a strategic Bitcoin reserve, the Biden administration made a rapid decision to liquidate the cryptocurrency.
This development aligns with a federal judge’s ruling issued on December 30, shortly after the new administration took office two weeks ago. The ruling followed the resolution of a prolonged ownership dispute involving Battle Born Investments, which had attempted to claim Bitcoin through a bankruptcy estate.
The investment firm criticized the decision, with its legal team accusing the Department of Justice of using “procedural tactics” to avoid a fair hearing of the facts. An attorney for Battle Born called it “Another blatant example of the DOJ’s misuse of the Civil Asset Forfeiture process.”
Following a rejection at the $100,000 level, Bitcoin has faced intense selling pressure, erasing its weekly gains. As of this writing, Bitcoin is trading 2.47% lower at $93,915.9, with a market capitalization of $1.86 trillion.
Additionally, Bitcoin’s performance in the derivatives market has been weak, as funding rates have dropped sharply.
CryptoQuant analyst ShayanBTC noted “During the recent Bitcoin rally, funding rates spiked midway, indicating a delayed surge in demand. However, after Bitcoin encountered resistance at $108,000, funding rates fell significantly.”
The panic selling
Meanwhile, short-term traders appear to be engaging in panic selling, with on-chain data showing that they recently moved 23,200 BTC to exchanges at a loss. Despite the bearish sentiment, prominent voices like Robert Kiyosaki remain optimistic about Bitcoin’s future. Kiyosaki stated:
“BITCOIN crashing. Great news. I’m continuing to buy Bitcoin because a crash means it’s on sale. Remember, ‘Buy low… and HODL.’ Fewer than 2 million Bitcoins remain to be mined.”
Historically, January following a halving year has been highly volatile for Bitcoin. Former BitMEX CEO Arthur Hayes predicts a liquidity infusion of $612 billion by Q1 2025, which he believes will drive Bitcoin to new highs.
In the meantime, El Salvador’s President Nayib Bukele has hinted at increasing the country’s Bitcoin holdings as the U.S. government offloads its reserves. He remarked, “Perhaps we’ll all get the chance to buy Bitcoin at a discount!”
