Bitcoin’s recent price rally has seen the primary cryptocurrency reach new all-time highs above the $100,000 level again. However, BTC has struggled to maintain these highs and has slipped back below $95,000 once more. Now, a recent crypto market update threatens to send Bitcoin even lower.
According to recent reports, a U.S. District Judge has ruled that the U.S. Department of Justice can sell its Bitcoin (BTC) holdings, which were seized during the infamous Silk Road case. This development raises questions about how an eventual sale of these Bitcoins will impact Bitcoin’s price trajectory.
The BTC in question were seized by the U.S. Department of Justice as part of its crackdown on Silk Road, a notorious darknet marketplace. These Bitcoins, which currently total 69,370 BTC, were seized as early as 2013 and have seen their collective value increase dramatically ever since. At the time of writing, the DOJ’s 69,370 BTC holdings are valued at over $6.58 billion.
According to a report by DB News that was corroborated by a U.S. government official, the DOJ is now fully authorized to liquidate the $6.58 billion in Bitcoin. This authorization follows the resolution of a year-long ownership dispute between the U.S. government and Battle Born Investments Company. The dispute was settled when Chief U.S. District Judge Richard Seeborg ruled against Battle Born Investments Company’s request to delay the sale. Interestingly, court documents regarding this case show that the judgment was made on December 30, 2024.
Bitcoin Price Crash Imminent?
While government officials have provided little clarity on whether the DOJ intends to sell its Bitcoin holdings in the near future, the possibility of a sale raises concerns about its potential impact on Bitcoin’s price. Given the size of the Bitcoin holdings, a large influx could flood the market with more BTC and create another wave of selling pressure on the Bitcoin price, which is already struggling to hold above $100,000. A prime example of this occurred in mid-2024 when a German state called Saxony sold 40,000 BTC, causing the Bitcoin price to plummet from above $70,000 to $56,000.
In the case of the DOJ’s holdings, the market impact of an eventual sale will depend largely on how the liquidation is executed. There is also the possibility of a rushed sale by the DOJ, especially considering that a new administration is set to take over by the end of January.
Speaking of the new administration, the incoming Trump administration has promised to be crypto-positive, and there have even been mentions of a Bitcoin reserve. This pro-crypto approach lessens the concerns regarding the DOJ’s liquidation of Silk Road’s 69,370 BTC. Nonetheless, Bitcoin could easily withstand if a selloff eventually happens, much like it did during Germany’s Saxony sale.
At the time of writing, Bitcoin is trading at $94,300.
