The United States Department of Justice (DOJ) has been cleared to sell around 69,370 Bitcoin (BTC USD) seized from the Silk Road marketplace.

Worth approximately $6.5 billion, this stash represents one of the largest cryptocurrency seizures in history. The decision came on December 30, following a federal court ruling that ended years of legal disputes.

The DOJ did not provide any prior notice about the sale, adding to market uncertainty. While the agency has yet to release details on the liquidation timeline, the Bitcoin was confiscated in 2020 from an individual referred to as “Individual X,” linked to the Silk Road’s illegal operations.

Legal Fights Over the Bitcoin (BTC USD)

The Bitcoin (BTC USD) sale came under a lot of pressure in the years that followed. Battle Born Investments, a group claiming ownership of the cryptocurrency, attempted to block the sale and demanded transparency regarding “Individual X.”

These allegations were dismissed by the court and U.S. District Judge Richard Seeborg granted the DOJ’s motion to sell the Bitcoin. The court concluded that the DOJ’s action was legal and the interest of individuals was more important than the interests of the public.

Some of the bitcoin, reportedly, have been liquidated already but this has not been confirmed. In December 2024, two billion dollars of Bitcoin was moved to Coinbase pursuant to a deal with the U.S. Marshals Service.

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How the Sale Could Affect Markets

This is not the first time the US government has confiscated Bitcoins either. Since 2014, the DOJ has sold a large number of cryptocurrency, and the biggest amount includes 30 000 Bitcoin which were bought by the investor Tim Draper.

Such selling has in the past created short term disturbance on the market but has not led to permanent damage.

The planned sale comes after the DOJ’s structured liquidation model where Bitcoins are sold in sealed bids to institutional investors to avoid market disruption and promote market integrity.

In the past, Bitcoin prices have tended to recover shortly after the initial falls in sales. The institutional investors have perceived the government auctions as a form of endorsement of the asset which has created more traffic to the market.

Nonetheless, due to the much higher volume in this sale, market responses may not be the same.

Experts are also keen to see if the DOJ will favor an OTC transaction or a public sale. An OTC sale may lessen market effect, while an auction may draw big institutions in search of cheap Bitcoin.

Bitcoin (BTC USD) Prices Reaction

The announcement of DOJ approval to sell Bitcoin (BTC USD) has affected the price. At press time Bitcoin dropped to $93,800 before recovering to $94,300. Further sales could lead to a decrease in the price of the Bitcoin, depending on how the Bitcoin is sold.

Arkham Intelligence reported that the wallet holding the Silk Road Bitcoin saw its balance drop to zero on January 8. This has raised questions if the liquidation process has commenced.

El Salvador Sees a Buying Opportunity

While the market is responding to the DOJ selling its Bitcoin (BTC USD), President of El Salvador Nayib Bukele suggested the government will purchase more Bitcoin. The country that recently made bitcoin legal tender has continued to buy during price drops.

President Bukele said that the DOJ’s sale could lead to further price drops which would allow El Salvador to buy more Bitcoins. With over 2,400 Bitcoin already held in its Treasury, any new purchases would further support the country’s crypto-focused economic strategy.