US Government’s $6.5B Silk Road Bitcoin Liquidation To Rattle the Market

The US government approved selling 69,370 BTC seized from Silk Road, worth $6.5 billion.
Traders adjust positions as DOJ plans Bitcoin sale, sparking market volatility.
Peter Schiff suggests selling seized BTC could reduce the US budget deficit.

The U.S. government has secured approval to liquidate 69,370 Bitcoin seized from the Silk Road marketplace. Worth about $6.5 billion, the move has raised fears in the crypto market as traders speculate on the potential impact of such a sale.

🚨[BREAKING] The US 🇺🇸 Government has received approval to sell 69,370 $BTC (~$6.5B) seized from Silk Road!

Note that previous sales did not directly impact the price, as they were done via OTC, but market panic often caused temporary drops.

Currently, the US Government holds… pic.twitter.com/DbZvmm4WyP

— Spot On Chain (@spotonchain) January 9, 2025

The Bitcoin, acquired during law enforcement operations, is part of the government’s total holdings of approximately 197,000 BTC, valued at $18.6 billion.

Seized Bitcoin and Market Reactions

After months of legal proceedings, the U.S. Department of Justice (DOJ) received a federal judge’s approval to sell the Silk Road-related Bitcoin. The DOJ has historically conducted such sales in a way that minimizes market disruptions. Still, traders have reacted with short-term volatility, leading to price fluctuations.

Many traders have adjusted positions, anticipating potential price dips. Others see the sale as an opportunity to buy Bitcoin at lower prices.

The legal battle surrounding the Bitcoin sale included challenges from Battle Born Investments, which sought to claim the seized assets through bankruptcy proceedings. The group’s Freedom of Information Act (FOIA) request to uncover the identity of “Individual X,” who surrendered the Bitcoin, was also unsuccessful.

Peter Schiff’s Take on the Sale

Economist Peter Schiff weighed in on the implications of the sale. He suggested that liquidating the seized Bitcoin could benefit the U.S. economy by helping reduce the 2024 budget deficit.

Schiff argued that the proceeds from the sale could help reduce the 2024 budget deficit, giving the current administration an advantage. Schiff also commented on President-elect Donald Trump’s proposal to establish a Strategic Bitcoin Reserve.

No he won’t. He never promised to buy any Bitcoin, just not tel sell what the government already owns. Biden can do him a favor by selling it all before Trump takes office. That way Trump won’t have to break that campaign promise.

— Peter Schiff (@PeterSchiff) December 9, 2024

According to Schiff, the sale might undermine Trump’s plans to avoid liquidating government-held Bitcoin. Schiff added that selling seized assets could preempt potential challenges in fulfilling campaign promises.

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