Finally US Government to Auctions Off $4.4 Billion in Bitcoin

The move by the US government to put $4.4 billion worth of Bitcoin up for auction may affect prices, depending on investor mood and market conditions. Significant sell-offs have the potential to drive prices down, particularly if market players interpret the auction as an indication of greater supply. The real impact on prices, however, will rely on a number of variables, such as the state of the market, the general level of interest in Bitcoin, and the response of investors to the news.

The lawsuit concerning the ownership of 69,370 Bitcoins that were taken from the infamous Silk Road bazaar has been rejected by the US Supreme Court to be heard.  The US government is now able to dispose of the $4.38 billion cryptocurrency that was seized in 2022 because of a ruling reached on Monday.

The US Government Transfers Bitcoin It Has Seen and Is Ready to Sell It

The dispute started when Battle Born Investments, a Nevada-based business, attempted to claim ownership of the Bitcoin that had been seized. Battle Born stated that it purchased the rights from Raymond Ngan's bankruptcy. The company referred to Ngan as "Individual X," and he was the one who reportedly stole Bitcoin worth billions of dollars from Silk Road before the government could confiscate it.

Battle Born's lawsuit was denied by a federal court in California in 2022, on the grounds that there was insufficient evidence to support Ngan's identity as "Individual X." The decision that Battle Born had no legal claim to the in dispute Bitcoin was likewise upheld by the federal appeals court in San Francisco. With the Supreme Court’s decision to not accept the case, it seems that the legal battle has come to a conclusion and the government may now proceed to wind down the cryptocurrency.

The United States government has initiated measures indicating its intention to liquidate the confiscated Bitcoin. Recently, a considerable amount of Bitcoin associated to Silk Road has been transferred to different wallets, suggesting possibly a sale. In July, transfers of Bitcoin valued at more than $2.6 billion took place. 

A number of these payments have raised questions about potential market manipulation, and some of them may be connected to Coinbase Prime, a platform that the US Marshals Service has been using. Historically, when governments opted to sell off massive sums of Bitcoin, the value of the cryptocurrency plummeted. 
Another example of this occurred earlier this year when the German government opted to sell off about 50,000 Bitcoins, which caused the price of the cryptocurrency to drop. The same pressure is expected to drive down Bitcoin values if the US proceeds with the auction.

Political Discussion About Bitcoin Seizures

The issue of what to do with Bitcoin that has been taken by the US government has come up for debate in the political arena. At a cryptocurrency conference in Nashville in July, Trump declared that, should he be re-elected, he will stick to his policy of not using public funds.

A "strategic Bitcoin stockpile" was another idea he put up, which is different from how the current administration handles cryptocurrency. Because of the former president's stance, there is now debate over whether the government should keep Bitcoin as an asset or keep selling it. As per the data provided by Bitcoin Treasuries, the US government possesses 203,239 BTC at present.