Highlights
- US government has sold Bitcoin worth $6.7 billion.
- US DoJ’s approval of Bitcoin selling comes after a prolonged ownership dispute with Battle Born Investments.
- Bitcoin shows weakness as funding rate drops before the Donald Trump inauguration ceremony.
- On-chain data reveals that short-term traders moved 23,200 BTC to exchanges at a loss, reflecting panic selling.
The US govt has dumped a massive 69,370 Bitcoins, worth a massive $6.7 billion, seized from the popular darknet marketplace Silk Road. This comes as the US Department of Justice (DoJ) approved clearing the prolonged dispute of BTC claims by Battle Born Investments. This has led investors to question whether another BTC price crash under $90,000 is coming soon as the asset took a dip under $93,000 earlier today.
US Govt Liquidates Silk Road Bitcoin on US DoJ Authorization
As reported earlier by DB News, the US DOJ approved the government to sell 69,370 Bitcoins seized from the Silk Road darknet. DOJ cited Bitcoin price volatility as the reason for allowing the US govt to liquidate the assets.
Hours after the reports, the balance in the US government wallet dropped to zero, from $6.7 billion on January 8, as per the data by Arkham Intelligence,
Interestingly, the selloff comes just 10 days before Donald Trump took office at the White House on January 20. While the Trump team has been thinking about building strategic Bitcoin reserve, the Biden govt has made a hasty decision to liquidate Bitcoin.
Interestingly, this decision from the federal judge comes soon after the new administration took charge of the office two weeks ago. The ruling, made on December 30, comes after the resolution of a prolonged ownership dispute with Battle Born Investments. The investment firm failed to get the ownership of BTC through a bankruptcy estate.
Battle Born’s legal team has strongly criticized the decision, with their attorney characterizing it as “another egregious example of the DOJ’s abuse of the Civil Asset Forfeiture process.” They argue that the government employed “procedural trickery to make sure the facts are never heard.”
BTC Price Correction Under $90,000 Soon?
Following the rejection at the $100K level, the Bitcoin price is seeing strong selling pressure wiping off all the weekly gains. As of press time, the BTC price is trading 2.47% down at $93,915.9 with a market cap of $1.86 trillion.
Furthermore, the BTC price is showing no strength in the derivatives market as the Bitcoin funding rates have dropped considerably. CryptoQuant analyst ShayanBTC noted:
“In the recent Bitcoin rally, Funding Rates showed a sharp increase midway through the upward trend, suggesting a delayed influx of demand. However, after Bitcoin faced rejection at the $108K resistance, Funding Rates declined significantly”.
On the other hand, short-term traders are moving to exchanges at a loss in what seems to be a panic selling ahead. As per the on-chain data, short-term holders have moved 23,200 to exchange recently at a loss.
Short-Term Holders moved 23,200 $BTC to Exchanges at a Loss. pic.twitter.com/lhTY2GmTZd
— Maartunn (@JA_Maartun) January 8, 2025
Top Leaders Continue to Remain Optimistic
However, popular leaders like Robert Kiyosaki stay bullish about BTC. He wrote:
“BITCOIN crashing. Great news. I continue buying Bitcoin because Bitcoin crashing means Bitcoin is on sale. Remember “Buy low….and HODL.” Less than 2 million more Bitcoins to be mined”.
The month of January following the halving year has always been volatile for Bitcoin, historically. On the other hand, former BitMEX CEO Arthur Hayes predicts a $612 billion liquidity infusion in Q1 2025 which will take Bitcoin to new highs.
El Salvador President Nayib Bukele hinted at adding more Bitcoins to its portfolio as US govt sold. He said, “Maybe we’ll all get the chance to buy Bitcoin at a discount!”
CoinGape