Based on CryptoQuant, the potential sale of $6.5 billion in Bitcoin seized from Silk Street is unlikely to have a major long-term affect available on the market, offered the transaction happens via over-the-counter (OTC) desks.
A report from January 9 highlighted that issues over this huge sale could be overstated, because the Bitcoin stash stays dormant for now.
The US Division of Justice (DOJ) obtained approval on January 8 to promote the confiscated Bitcoin, however no actions have been recorded but. Regardless of the uncertainty surrounding the sale, Bitcoin’s current decline, from its peak of $108,000 to only over $92,000, has been primarily pushed by panic promoting from short-term holders. Up to now day alone, over 36,000 BTC moved from short-term wallets to exchanges, with most of those cash being offered at a loss, contributing to the market’s current downward strain.
CryptoQuant’s evaluation means that the potential market affect from the Silk Street Bitcoin stash is minimal in comparison with the general enhance in Bitcoin’s realized market capitalization, which has risen by $381.7 billion within the final 12 months. This progress dwarfs the worth of the seized Bitcoin, making it much less possible that its sale will create lasting downward strain available on the market.
The agency additionally acknowledged that promoting the Bitcoin instantly on crypto exchanges might result in short-term volatility, as evidenced by the German authorities’s 50,000 BTC sale in 2024, which affected Bitcoin’s worth. Nonetheless, the impact of the Silk Street Bitcoin sale will rely largely on how the DOJ handles the transaction.
