The price of bitcoin has <a target="_blank" href="https://www.newsbtc.com/bitcoin-news/bitcoin-plunges-below-100k-despite-positive-coinbase-premium-signal-whats-next/” rel=”nofollow noopener” target=”_blank”>been in a new decline in the last 24 hours after it very briefly broke above the $100,000 level again. This drop has seen bitcoin fall back below the $95,000 price mark, but a recent crypto market update threatens to send it even lower. According <a target="_blank" href="https://x.com/lookonchain/status/1877180836841144744″ rel=”nofollow” target=”_blank”>recent reportsA US district judge ruled that the US Department of Justice can sell its bitcoin holdings, which were seized during the <a target="_blank" href="https://www.newsbtc.com/news/bitcoin/silk-road-bitcoin-almost-certainly-sold-by-us-gov/” rel=”nofollow noopener” target=”_blank”>infamous Silk Road case. With this development, an eventual sale of these Bitcoins raises the question of how this will affect the trajectory of bitcoin price.
Green light to liquidate Silk Road btc
The btc in question were seized by the US Department of Justice as part of its crackdown on Silk Road, a notorious darknet marketplace. These Bitcoins, which currently amount to 69,370 btc, were seized as early as 2013 and their collective value has grown enormously since then. At the time of writing, the Department of Justice's holding of 69,370 btc is worth more than $6.58 billion.
According to a <a target="_blank" href="https://x.com/tier10k/status/1877176406905356670″ rel=”nofollow” target=”_blank”>DB News report As corroborated by a US government official, the Department of Justice 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 resolved when U.S. District Judge Richard Seeborg ruled against Battle Born Investments Company's request to delay the sale. Curiously, court documents In this case, it appears that the sentence was issued on December 30, 2024.
Is bitcoin price drop imminent?
Although government officials have provided little clarity on whether the Justice Department intends to sell its bitcoin holdings in the near future, the possibility of a sale raises concerns about its potential impact on the price of bitcoin. Considering the value of bitcoin holdings, a large influx could flood the market with more btc and create another selling pressure on the price of bitcoin, which is already struggling to stay above $100,000. A good example of this is 40,000 btc. sold by a German state called Saxony in mid-2024, in which the price of bitcoin fell from over $70,000 to $56,000.
In the case of DOJ holdings, the market impact of an eventual sale depends largely on how the liquidation is executed. There is also the possibility of an accelerated sale by the Department of Justice, especially considering that a new administration will take office at the end of January.
Speaking of the new administration, the new Trump administration promises to be cryptopositive, and there have even been mentions of a bitcoin reserve. This crypto-positive approach reduces fear of liquidation of Silk Road's 69,370 btc by the Department of Justice. However, bitcoin could easily hold out if a sell-off eventually occurs, as occurred during the Saxony sale in Germany.
At the time of writing, bitcoin is trading at $94,300.
Featured image created with Dall.E, chart from Tradingview.com
