Zinger Key Points
- The US government's Bitcoin holdings from seizures are now worth $8.3 billion, presenting a potential supply shock upon liquidation.
- If the U.S. government had held on to all its 400,000 BTC, its portfolio would have been worth $17.4 billion today.
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The U.S. government's significant accumulation of Bitcoin BTC/USD, currently valued at $8.3 billion, has raised concerns about potential market impacts if these holdings were to be liquidated.
Over the last two years, U.S. authorities have seized 207,189 Bitcoin through operations linked to Silk Road, hacker Jimmy Zhong, and Bitfinex hackers, Blockworks reported.
The value of this stockpile has increased by $3.3 billion in less than three months thanks to the Bitcoin price rally. While only 5% has been sold so far, the large stockpile presents risks if liquidated in bulk.
Selling the 41,491 BTC still held from Silk Road could flood the market with an oversupply of Bitcoin, prompting prices to tumble if demand does not absorb the excess Bitcoin.
Previous government sales, such as the 9,861 BTC from Silk Road netting $215 million, show the potential impact. A larger sale now could have substantial effects, given Bitcoin's 7,000% rise in value over the last decade.
Had it held all seizures, the U.S. portfolio would be around 400,000 BTC worth $17.4 billion today. Its decision to hold or sell such a sizable position will be crucial, as significant liquidations could trigger bearish price moves
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More Silk Road coins may sell in the coming months, and no timeline exists for Bitfinex hackers' Bitcoin. This uncertainty adds to volatility as the market awaits any potential large sales.
Other countries like China have also amassed substantial Bitcoin holdings, such as the 195,000 BTC seized from the PlusToken Ponzi scheme.
The collective decisions of these major holders to hold or sell their Bitcoin assets could significantly influence the global cryptocurrency market dynamics.
As the cryptocurrency landscape continues to evolve, the actions of major government holders like the U.S. will be closely watched for their potential to sway market sentiments.
Read Next: Bitcoin ETF Could Be Just Days Away — Are You Ready?
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