The crypto gains of 11% in early 2025 came to a halt and the market saw yet another bloodbath dropping 5% this week with Bitcoin, Ethereum, and XRP taking a sharp decline.
The crypto fall came after, the U.S. Department of Justice (DOJ) was approved to sell 69,370 Bitcoin seized from the infamous Silk Road darknet marketplace. According to DB, the commercial value of crypto assets is approximately $6.5 billion, the Bitcoin stash has been at the center of a protracted legal battle.
The court ruling on December 30 dismissed claims from Battle Born Investments, which had sought ownership through a bankruptcy estate and attempted to delay the sale.
Why Sell Now?
After a long legal tug-of-war, a federal judge finally gave the green light for the DOJ to cash in on the crypto. The DOJ justified the liquidation, citing concerns over Bitcoin’s price volatility and the potential risk of value loss if the assets were held for too long. A spokesperson confirmed the department’s intent to proceed with the sale in alignment with the court’s judgment. The U.S. Marshals Service is expected to manage the liquidation process, which could become one of history’s largest crypto asset sales.
This decision comes after the U.S. Supreme Court declined to hear an appeal challenging the seizure last October. Battle Born also pursued a Freedom of Information Act request to uncover the identity of “Individual X,” who initially surrendered the Bitcoin, but that effort also failed.
The news of selling the assets before Trump’s inauguration on January 20 is raising the eyebrows of crypto investors making the market a bit shaky. Crypto assets are already facing a downtrend due to the FOMC meeting.
Crypto Reaction
The market’s reaction to the news was immediate, with Bitcoin’s price dropping nearly 3%, from $95,000 to $93,800, before stabilizing around $94,300. Analysts suggest that such a significant liquidation could add downward pressure on the market, raising concerns about broader impacts on Bitcoin’s price stability.
A crypto user known as DefiBanked hints at political motives behind the DOJ’s plan to sell 69,000 Bitcoin, suggesting the profits might be directed toward Ukraine. A move driven by Biden’s administration to suppress Bitcoin.
The DOJ’s move underscores its focus on resolving high-profile crypto cases and recovering assets tied to illicit activities. While the government has yet to release an official statement, for the crypto world, it’s a reminder that even digital assets aren’t beyond the law’s reach.
While the case outcome will set a precedent for future crypto cases, this government sell-off can also create a massive liquidity issue and many fear that it is a planned strategy by Biden to Stop Trump’s Bitcoin reserve plan. There is a buzz in the market that it is a planned move to drop Bitcoin prices as many analysts also think this is a trick to manipulate Bitcoin prices.
