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The US is about to dump a massive amount of Bitcoin onto the market – 69,370 BTC, to be exact. This gigantic sum, currently worth $4.3 billion, was originally seized in connection with the shutdown of the notorious darknet marketplace Silk Road. But now that the US Supreme Court has dismissed the case, these BTC could actually be sold.
Background: The Silk Road Case
The Silk Road was an illegal marketplace on the darknet that flourished between 2011 and 2013. Drugs, weapons and other prohibited goods could be traded for Bitcoin on the platform. In 2013, the site was taken down by the US authorities and the operators, especially Ross Ulbricht, were arrested. In the course of the investigation, BTC worth several billion US dollars was confiscated.
But here’s where the drama begins: Battle Born Investments, a company claiming to have the rights to these BTC, took the case to court. They argued that a debtor from the Silk Road bankruptcy case, Raymond Ngan, was the mysterious “Person X” who stole the bitcoins. However, this claim was dismissed by the US courts – both at the federal level and on appeal.
Now the Supreme Court has finally rejected the case on October 7 , meaning that Battle Born can no longer make any claims to the BTC. This clears the way for the US government to sell the seized BTC.
Is Bitcoin now at risk of a price slump?
Many now fear that the sale of over 69,000 BTC could put significant pressure on the market. This is not the first time that the US government has sold confiscated BTC – such sales have often triggered short-term price fluctuations in the past. So the question is whether this sale could have a similar effect.
Peter Schiff, a well-known BTC critic, sees the possible sale as one of the few “smart decisions” made by the government. He assumes that this step could have a negative impact on the BTC price. But not everyone shares his pessimistic view.
It looks like the U.S. government is getting ready to sell 69,370 #Bitcoin, worth about $4.3 billion at current market prices. Every once in a while, the government does something smart. I think @saylor should have $MSTR borrow another $4.3 billion and buy it. Who agrees with me?
— Peter Schiff (@PeterSchiff) October 8, 2024
Some analysts believe that the market may be able to handle the selling better than many think. There is already a lot of speculation on crypto Twitter that large institutional investors like BlackRock may be interested in acquiring the Bitcoin. Given their close ties to the US government and their enormous market power, it would not be unlikely that they could buy up a large portion of this BTC.
The Political Dimension of Bitcoin Sales
Interestingly, the future of this Bitcoin has also become a political issue. Former President Donald Trump claimed in his recent election campaign that he would not sell the confiscated BTC, but would keep it as part of a national reserve. This has long put the oldest and largest cryptocurrency at the center of the political agenda.
Will the sale really lead to a significant disruption of the market or will it be absorbed by major players? One thing is clear: if the sale does take place, we could be in for an interesting rollercoaster ride that market participants should prepare for.
Conclusion: What comes next?
With the green light from the Supreme Court, the sale of the 69,370 BTC will soon become a reality. Will there be a price slide or will large institutional investors enter the market? Short-term fluctuations are almost certain, but in the long term it remains to be seen how strongly the market will react to the selling pressure. One thing is certain – the next few weeks could be volatile.
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