The US government has announced its plans to offload a significant portion of the cargo his Bitcoin (BTC) holdings. This move has raised concerns in the crypto community given the heavy selling pressure it could add to demand crypto market is already facing.
US government to sell $130 million worth of Bitcoin
The Department of Justice (DOJ) has notified its intention to sell Bitcoin worth more than $130 million. This crypto assets are part of what was forfeited to the government her case against Joseph Farace. The DOJ specifically noted that it seized nearly 2,875 BTC from Farace and Sean Bridges and another 58.7 BTC from Farace alone.
Farace, also known as the Xanax Man, had ties to the Silk Road as he pleaded guilty to the production and distribution of alprazolam on the dark web marketplace. The Bitcoin confiscated from him forms part of the more than 69,369 BTC that the… It is believed that the US government is doing this to have recovered as proceeds from Silk Road.
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A sale of such magnitude is concerning as it could have a notable impact on the price of Bitcoin and the broader crypto market. Moreover, this comes at a time when the market is already under significant selling pressure from whales and others Grayscale, Celsius and FTX. However, it’s worth noting that this proposed government sale may not happen anytime soon.
In the notice, the DOJ also announced that any other person, other than the defendant, claiming an interest in the forfeited property had 60 days to advance their claims. As such, it’s more than likely that the sale won’t take place until after the 60-day period expires, which doesn’t end until sometime in March.
BTC price begins another recovery trend | Source: BTCUSD on Tradingview.com
Selling pressure could diminish quickly
The daily outflows that Grayscale’s GBTC recently faced suggest that Bitcoin’s selling pressure could cool off soon. The Spot Bitcoin ETF has seen lower outflows since then Bloomberg analyst James Seyffart reported that the fund saw $640 million outflow on January 22, the largest to date.
Since then, GBTC has been said having seen outflows of $515 million, $429 million and $394 million respectively on January 23, 24 and 25. If this turns out to be a trend, the mutual fund is expected to stop bleeding soon enough. That also means good news for the crypto market Grayscale will cool down by offloading large sums of Bitcoin daily.
At the time of writing, Bitcoin is only trading slightly above $40,000according to facts from CoinMarketCap.
Featured image from Coinmama, chart from Tradingview.com
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