The US government has revealed its plans to offload a significant portion of its Bitcoin (BTC) holdings. This move has raised concerns in the crypto community, considering how much selling pressure this could add to what the crypto market is already facing.
US Government To Sell $130 Million Worth Of Bitcoin
The Department of Justice (DOJ) gave notice of its intent to dispose of over $130 million worth of Bitcoin. These crypto assets form part of what had been forfeited to the government in its case against Joseph Farace. The DOJ specifically noted that it had seized almost 2875 BTC from Farace and Sean Bridges and an additional 58.7 BTC from Farace alone.
Farace, also known as the Xanaxman, had ties to the Silk Road as he pled guilty to manufacturing and distributing alprazolam on the dark web marketplace. The Bitcoin confiscated from him forms a portion of the over 69,369 BTC, which the US government is believed 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 Bitcoin’s price and the broader crypto market. Moreover, it comes at a time when the market is already under significant selling pressure from whales like Grayscale, Celsius, and FTX. However, it is worth noting that this proposed sale by the government might not happen anytime soon.
In the notice, the DOJ also announced that any other person aside from the defendant claiming an interest in the forfeited property had 60 days to come forward with its claims. As such, it is more than likely that the sale will not occur until the expiration of the 60-day period, which doesn’t lapse until sometime in March.
Selling Pressure Might Soon Cool Off
The daily outflows that Grayscale’s GBTC has faced recently suggest that the Bitcoin selling pressure might soon cool off. The Spot Bitcoin ETF has seen lower outflows since Bloomberg analyst James Seyffart reported that the fund saw $640 million flow out on January 22, its largest yet.
Since then, GBTC is said to have seen outflows of $515 million, $429 million, and $394 million on January 23, 24, and 25, respectively. If this turns out to be a trend, then the investment fund is expected to stop bleeding soon enough. That also spells good news for the crypto market as Grayscale will cool off on offloading large sums of Bitcoin daily.
At the time of writing, Bitcoin is trading just a little above $40,000, up in the last 24 hours, according to data from CoinMarketCap.
