US Government's $118 Million Bitcoin Sale Compared to GBTC
Date: 2024-01-26 Author: Dima Zakharov Categories: BLOCKCHAIN
The US government recently announced its intention to sell 2934 bitcoins, which were seized during the Silk Road investigation, after the conviction of Silk Road Xanax dealer Ryan Farace and his 72-year-old father Joseph Farace for money laundering conspiracy. This announcement has sparked fears of a potential Bitcoin crash within the cryptocurrency community.
Steven Lubka, the Managing Director of Swan Bitcoin, has a different perspective on this matter. He believes that the government's sale will be relatively small compared to the recent outflow of funds from the Grayscale Bitcoin Trust (GBTC) over the past week. Lubka commented, "This is tiny; we ate four times more GBTC sales for breakfast."
Grayscale made headlines on January 11th when it converted GBTC into a spot exchange-traded Bitcoin fund, selling 106,575 bitcoins worth $4.2 billion. On January 24th alone, GBTC witnessed an outflow of 10,871 bitcoins.
It's worth noting that the planned government sale represents only 1.5% of the total confiscated bitcoin holdings, estimated at 194,188 bitcoins (approximately $7.7 billion). These bitcoins were seized in connection with various illegal activities.
The three largest bitcoin confiscations by the US government are:
1. 94,643 bitcoins seized in January 2022 in the Bitfinex hack case.
2. 69,369 bitcoins confiscated in November 2020 from Silk Road.
3. 51,326 bitcoins seized from Silk Road hacker James Zhong.
During 2023, the US government had already sold 41,000 of these bitcoins, initially through auctions. However, it has now shifted to selling confiscated cryptocurrency on exchanges, with the latest known sale of 9,118 bitcoins occurring in March 2023.
