Bearish Signals Flash as US Government Plans Massive Bitcoin Sell-Off of $1.8 Billion

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The United States government is gearing up to sell off a substantial chunk of Bitcoins, surpassing even corporate giant MicroStrategy in crypto holdings. The planned sale involves the remaining 41,491 Bitcoins seized from the notorious Silk Road, with an estimated current value of $1.8 billion.

US Government’s Crypto Holdings Skyrocket

The recent surge in Bitcoin prices has proven lucrative for the US government, pushing its Bitcoin holdings to a staggering $8.3 billion. This substantial increase from $5 billion in just three months stems from actions taken between November 2020 and 2022. 

During this period, authorities seized and disclosed a significant 207,189 Bitcoins linked to various cases, including the Silk Road dark web market and the Bitfinex crypto exchange breach.

On the flip side, MicroStrategy, a major player in the corporate crypto space, holds 189,150 Bitcoins acquired for approximately $5.9 billion. The US government’s holdings now surpass even this significant corporate player, showcasing the government’s unintentional venture into the crypto market.

Meanwhile, the US government might hold more Bitcoin than El Salvador, Ukraine, Bhutan, Venezuela, and Finland combined. China can rival the US if it doesn’t sell off its cryptocurrency holdings early, having seized 195,000 BTC ($8.4 billion) in 2020.

US Government’s Bitcoin Sales Strategy Unfolds

With less than 5% of Silk Road Bitcoins sold to date, the US government, through the Department of Justice, unveils plans to sell the remaining 41,491 Bitcoins in four batches over the next two months. This move follows a prior sale of 8,200 Bitcoins, valued at $252 million at the time and now at $350 million, to Coinbase in July of the previous year.

If confirmed, these transactions could translate into a significant financial gain of $640 million for the US government from the seizure and sale of Bitcoin over the past decade. Notably, retaining all seized Bitcoins would have nearly doubled the government’s holdings to around 400,000 Bitcoins, valued at $17.4 billion today.

What’s Next For Crypto?

As the US government emerges as a potential global leader in government-held Bitcoins, surpassing the combined holdings of several countries, including China, the crypto landscape braces for impact. 

The market watches closely for the potential liquidation of more Silk Road Bitcoins and uncertainties surrounding the sale of Bitcoins seized from Bitfinex hackers.