The Bitcoin price has been on a fresh decline in the past 24 hours after it broke above the $100,000 level again very briefly. This decline has seen Bitcoin break below the $95,000 price mark again, but a recent crypto market update is threatening to send it further down. According to recent reports, a US District Judge has ruled that the US Department of Justice can sell its Bitcoin holdings, which were seized during the infamous Silk Road case. With this development, an eventual sale of these Bitcoins raises the question of how this will impact Bitcoin’s price trajectory.
Greenlight To Liquidate Silk Road BTC
The BTC in question were seized by the US DOJ as part of its crackdown on Silk Road, a notorious darknet marketplace. These Bitcoins, which currently amount to 69,370 BTC, were seized as far back as 2013 and have seen their collective value grow massively since then. At the time of writing, the DOJ’s 69,370 BTC holding is worth more than $6.58 billion.
According to a report from DB News that was corroborated by a U.S. government official, the DOJ is now fully authorized to liquidate the $6.58 billion worth of 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 judgement was made on December 30, 2024.
Bitcoin Price Crash Imminent?
Although 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. Considering the value of the Bitcoin holdings, a huge influx could flood the market with more BTC and create another selling pressure on the Bitcoin price, which is already struggling to hold above $100,000. A prime example of this is the 40,000 BTC sold by a German state called Saxony in the middle of 2024, which saw the Bitcoin price fall from above $70,000 to $56,000.
In the case of the DOJ’s holdings, the market impact of an eventual sale depends heavily on how the liquidation is executed. There is also the possibility of a hastened sale by the DOJ, especially considering a new administration is set to come in by the end of January.
Speaking of the new administration, the new Trump administration promises to be crypto-positive, and there have even been mentions of a Bitcoin reserve. This crypto-positive approach reduces the fear of liquidation of Silk Road’s 69,370 BTC by the DOJ. Nevertheless, 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.
Featured image created with Dall.E, chart from Tradingview.com
