The United States Department of Justice (DOJ) has received approval to sell 69,370 Bitcoin, valued at approximately $6.5 billion, seized from the Silk Road darknet marketplace.
This decision marks the culmination of a contentious legal battle and raises questions about the implications for the cryptocurrency market. Market participants are jumpy, if the sale goes ahead it could crash the Bitcoin price.
Federal Approval and Legal Context
A federal judge ruled on December 30, 2024, that the DOJ could proceed with liquidating the seized assets, according to DB News. This decision closes a protracted dispute involving Battle Born Investments, which had claimed ownership of the Bitcoin through a bankruptcy estate. Battle Born argued it had lawful rights tied to an individual accused of misappropriating Silk Road funds.
Source:DB via X
Despite pursuing the case through multiple levels of the judicial system, including the U.S. Supreme Court, Battle Born’s claims were ultimately dismissed. The company’s attorney criticized the DOJ’s handling of the matter, alleging procedural misconduct.
Strategic Implications and Market Impact
The timing of the liquidation aligns with the transition to a new administration. President-elect Donald Trump has proposed establishing a “Strategic Bitcoin Reserve,” similar to the Strategic Petroleum Reserve, to manage confiscated digital assets and mitigate economic risks. While this policy signals a shift in how seized cryptocurrencies might be handled in the future, it remains uncertain whether the current Bitcoin stash will be included in such a reserve.
Source:DB via X
The decision to liquidate such a significant volume of Bitcoin has raised concerns about its potential effect on market prices. Historically, large sales of seized Bitcoin by government entities have been conducted in smaller batches to minimize market disruption.
Ki Young Ju, CEO of CryptoQuant, reassured investors by noting that the $6.5 billion sale could be absorbed within a week, given the market’s capacity. “Last year, $379 billion entered the market based on realized cap—roughly $1 billion per day. The U.S. government selling $6.5 billion could be absorbed in just a week,” he stated on social media.
Bitcoin Price Retreats Below Six Figures
Despite official confirmation of the DOJ’s authority to sell, conflicting reports have emerged. Blockchain analysis suggests no movement of funds from the associated Bitcoin address, which still holds the 69,370 BTC. However, other sources, including crypto influencer @trading_axe, allege that the Bitcoin has already been distributed through Coinbase. These claims remain unverified.
Bitcoin (BTC) price chart. Source:Bitcoin Liquid Index (BLX) viaBrave New Coin
Bitcoin’s price, which briefly crossed the six-figure mark on January 7, has since declined. At the time of writing, it was trading around $93,300, down 2% for the day. Analysts suggest that panic selling could ensue if the price falls below $90,000, the lower bound of its consolidation channel.
Bottom Line
The DOJ’s approval to sell the Silk Road Bitcoin underscores the evolving intersection of cryptocurrency and law enforcement. This development highlights the challenges of managing seized digital assets in a volatile market. While the market appears resilient to the news, the potential sale—or retention—of these assets will likely remain a focal point for investors, policymakers, and industry stakeholders, shaping discussions on regulatory strategies and market stability in the coming months.
