Analyst: Market Concern Over Potential US Department of Justice Bitcoin Selloff Is Overblown

BlockBeats News, January 9th, DB News reported that the U.S. Department of Justice has been authorized to liquidate the 69,370 BTC (worth about $6.5 billion) seized in the Silk Road case. Coindesk analyst James Van Straten stated that market concerns about the sell-off may be exaggerated and listed the following reasons:

The reports about the liquidation of 69,370 bitcoins seem plentiful. If they are indeed sold, they are likely to be sold in an orderly manner to obtain the best price. Meanwhile, the market has long been aware that this situation was a possibility, so this possibility may have already been priced in by the market.

Secondly, since September, the market has absorbed over 1 million bitcoins. This can be seen through the decrease in holdings of long-term holders, defined by Glassnode as investors holding bitcoins for over 155 days. As a group, they now hold 13.1 million bitcoins. However, since September, the price has risen from about $60,000 to over $100,000.

The final reason is that we have historical data about another government selling a similar amount of bitcoins. The German government sold approximately 50,000 bitcoins between mid-June and mid-July 2023. At that time, the total value of these bitcoins was about $3.5 billion, which is now roughly half. However, the market actually anticipated the sell-off in advance, and around July 7th, the price bottomed out at around $55,000 while the German government still held at least 25,000 bitcoins. This indicates that the quantity of bitcoins will not dominate the market.