The United States plans to sell $118 million in Bitcoin from the Silk Road, with experts expressing reassurance, highlighting its relatively modest size in comparison to Grayscale sales and the overall holdings of the U.S.
Photo by Nick Chong on Unsplash
The U.S. government is set to auction $118 million worth of Bitcoin, confiscated following the Silk Road hack. Despite initial concerns about potential market impact, experts remain unperturbed. The sale, involving 2,934 BTC, comes after the conviction of Silk Road's Ryan Farace and his father on money laundering charges.
Contrary to fears of a significant Bitcoin price drop, Steven Lubka from Swan Bitcoin points out the relatively small scale of this sale compared to recent Grayscale Bitcoin Trust transactions. Grayscale, a spot Bitcoin ETF, sold 106,575 BTC, equivalent to $4.2 billion.
Furthermore, the U.S. government's Bitcoin sale represents only 1.5% of their overall holdings, which stand at 194,188 BTC. This amount is still less than 1% of the total Bitcoin supply.
The government accumulated these holdings from various sources, including the seizure of Bitcoin during the Bitfinex hack, Silk Road operations, and assets confiscated from hacker James Zhong.
In the broader context, a total of 41,000 BTC is scheduled for sale in 2023, inclusive of the current batch. During these sales, the U.S. government often opts for auctions, as exemplified by Tim Draper's acquisition of 30,000 BTC through a government auction in 2014.
However, recent trends indicate a preference for selling on exchanges, with a notable 9,118 BTC sold in March 2023.
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