In a document published this Friday (31), the US government confirms the sale of 9,861 bitcoins for US$215.5 million (R$1 billion). The negotiation took place on March 14, a week after the amount was sent to the Coinbase exchange.
On the date, Bitcoin rose from $24,210 to $26,530, but ended the day at $24,750. Since there is no information on how the sale was conducted, whether through OTC (over-the-counter sales) or on the open market, there is no way to say whether it has had an impact on Bitcoin’s price.
Another point to analyze is that the US still has 41,490 bitcoins, equivalent to R$6 billion at the current exchange rate, which will meet the same fate.
US changes sales strategy for seized bitcoins
While many thought the US would auction off its 205,515 bitcoins (R$29.3 billion), as has happened in the past, US authorities are taking a different path.
The reason may be related to the maturation of the market. After all, not only is it more liquid, but it also has listed brokers. That is why the US chose to sell these bitcoins on the market.
The 9,861 bitcoins sold are linked to the 2012 Silk Road hack. However, James Zhong’s arrest did not take place until November 2021, when they seized more than 50,000 bitcoins in a can of popcorn.
“With regard to the 51,351,89785803 Bitcoins seized in the Ulbricht case before Judge Schofield, the government has begun its liquidation (sale).”
“On March 14, 2023, the government sold 9,861,1707894 BTC (out of 51,351,89785803 BTC) for a total of $215,738,154.98”points to the official document. “After [o pagamento de] US$215,738.15 in transaction costs, the net resources for the government were US$215,522,416.83 (R$1.09 billion).”
That is, Bitcoin endured a strong BRL 1 billion sell-off, followed its uptrend in the following days, and ended the quarter with a 72% appreciation.
Another BRL 6 billion in Bitcoin will suffer the same fate, putting pressure on the market
Subsequently, the US reports that the remaining bitcoins will also be dumped on the market. Therefore, theories that the US government would become a holder of bitcoin were abandoned.
“Of the bitcoins lost in the Ulbricht case, approximately 41,490.72 BTC remain, which the government understands will need to be settled in four more batches this calendar year.”
That is, we can expect four more bitcoin sales this year, equivalent to BRL 1.5 billion by the US government, totaling BRL 6 billion. Despite the market taking the initial blow, the amount is frightening, especially with investors concerned about Bitcoin’s liquidity.
Finally, the US also seized 25 physical Bitcoin coins from the Casascius collection, totaling about 174 bitcoins, as well as several bars of metals such as gold and silver that were in the possession of James Zhong. The government has not yet announced the auction of these items.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
