The United States first began selling confiscated bitcoins in 2014. These bitcoins were seized from Silk Road, a dark web marketplace used to sell illegal goods, where the US government seized around 30,000 bitcoins from the site after its founder was arrested.

Impact on Bitcoin Price: When the US government announced the sale of bitcoins in an auction in 2014, there were expectations that the price would be negatively affected due to the increased supply in the market. However, in reality, bitcoin did not drop as dramatically as expected; initially, the market experienced slight fluctuations but quickly recovered after the auction. One reason for the lack of a significant drop was the increased demand for bitcoins at the time, which offset the negative impact of the additional supply in the market.

Purpose of Bitcoin Sale: The primary purpose of selling confiscated bitcoins is to dispose of illegal assets seized during criminal investigations and convert them into money that can be used legally. The proceeds from these auctions are often used to support anti-crime programs or fund law enforcement agencies.

The US government continues to sell confiscated bitcoins on a regular basis, and these auctions are often announced in advance, giving the market a chance to prepare and thus reducing the potential negative impact on prices.