Key Insights:
The US Department of Justice has cleared off the sale of $6.5 billion worth of Bitcoins seized from the Silk Road.
After the sale, the US government will hold approximately $12 billion worth of Bitcoins.
The decision to sell Bitcoins by the Biden administration is the complete opposite of Donald Trump's policy to use Bitcoin for US Strategic Reserves.
Investment in Bitcoin could reduce the US National Debt by 36%.
The US Department of Justice has just cleared the Sale of $6.5 billion in Bitcoins that were seized from the Silk Road marketplace. The marketplace was operated by Ross Ulbricht, who received a lifetime prison sentence for operating the dark web marketplace.
At present, the US government owns around $18.5 billion worth of Bitcoins and $400 million worth of other cryptocurrencies including USDT, ETH, and WBTC. The sale would leave around $13 billion worth of Bitcoin in the hands of the US government.
US Government Bitcoin Reserves Before the $6.5 Billion Sale
Arkham Intelligence
The sale went moments after the clearance but did not impact the markets much.
At press time, Bitcoin traded around $93k with an intraday loss of 2.68%. Compared to the previous sale of 240k Bitcoins by the US government under Biden, this sale made little to no impact on the market. This is because, at present, Bitcoin sees a market volume of around $64 billion per day. Further, institutions (like MicroStrategy) and 50 million Bitcoin retail owners would rapidly absorb the sales.
On the other hand, Donald Trump has a very pro-Bitcoin policy that would rather purchase them from the open market than dumping them.
In his Bitcoin 2024 conference at Nashville and subsequent statements, Trump has already mentioned his plans to build a Bitcoin reserve in the US Strategic Reserves. This would help the country reduce its National Debt and back the US dollar.
As per an estimate, the US Government could reduce its strategic debt by 36% by 2050 if it invests in Bitcoin. This is simply because Bitcoin has been one of the best investment assets to beat inflation. The same was shown by MicroStrategy chairman Michael Saylor in his presentation.
The current attempt by the US Government to sell the $6.5 billion worth of Bitcoins comes barely a few days before Donald Trump becomes the US President on 20 January 2025. This attempt seems to derail the pro-crypto ambitions of the upcoming administration under Trump.
The Biden Administration has been well-known for its anti-crypto policy and using the SEC to intimidate into submitting, like in the XRP case. Several other companies like Uniswap, Rocketpool, and MetaMask were also targeted
Opposite to this Donald Trump has promised a fair and free crypto ecosystem along with a Bitcoin acquisition plan that helps US government build a strong US Dollar and also reduce debt. Further, the Department of Government Efficiency (D.O.G.E.) would seek to control spending so that there is a lesser fiscal deficit which results in lower inflation and hence lower interest rates.
Bitcoin and broader crypto markets are expected to rise very soon as the crypto fear and greed index has gone back to greed levels at press time. Further, there is a bullish undercurrent in the crypto markets due to the institutional and ETF investments in Bitcoin and Ethereum.
Bitcoin's Price After US Government Sold $6.5 Billion BTC
CoinMarketCap
As per our experience in the crypto markets, we assume that Bitcoing could jump back again above $100k after Donald Trump's swearing-in. Trump is expected to bring sweeping reforms in the crypto markets in the first quarter of 2025.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.