The US government is selling

Bitcoin is still consolidating around 28.5k overnight.

Recently, the execution records released online on March 31st showed that in the case of the U.S. government v. James Zhong, the U.S. government had sold 9,861+ BTC on March 14, 2023, accounting for 19% of the total confiscation of 51,351+ BTC. The net profit after deducting the transaction fee from the sale of coins was $215 million.

A small detail is that the handling fee paid by the US government for selling Bitcoin (BTC) is exactly one thousandth of the transaction amount. It is not clear which platform helped the transaction.

The original source of these BTC was the famous dark web e-commerce platform "Silk Road" that was shut down by the FBI. The founder Ross Ulbricht is still in prison in the United States. During the investigation, the FBI found that approximately 51,351+ BTC had been stolen from Silk Road.

As early as 2012, about a year after the establishment of Silk Road, James Zhong discovered a loophole in Silk Road's payment system. He noticed that the platform's total revenue was about 50,000 BTC. So he registered a bunch of fake accounts, deposited first and then withdrew, and stole almost all the BTC on the platform in batches.

The mantis stalks the cicada, unaware of the oriole behind it. The oriole is behind it, and the eagle is behind it.

The FBI followed the clues and found James Zhong. He took advantage of the code loopholes of Silk Road and stole these BTC in batches. On November 9, 2021, 50,491+ BTC were found in James Zhong's home. Later, on March 25 and May 25, 2022, James Zhong voluntarily handed over 825+ BTC and 35+ BTC respectively.

In fact, the FBI got more BTC from James Zhong (about 330 more BTC), but some of them cannot be traced back to Silk Road. The extra BTC may be handled separately, such as convicted and punished for money laundering or other crimes.

After selling 9,861+ of the 51,351+ BTC attributed to the Silk Road case, the U.S. government is left with 41,490+ BTC. The document states that it will be sold in four batches within a calendar year, that is, within 2023. The IRS (Internal Revenue Service) said that the second batch of sales will not be carried out before the verdict of the James Zhong case.

Looking back today, BTC fell from 25.9k on the opening day on March 15th, and fell to a low of 24k, which temporarily interrupted the rise from March 11th to 14th, especially the rapid rise on March 13th and 14th.

Although the trend was briefly interrupted, the market quickly absorbed the selling pressure, rebounded on March 16, and continued the upward trend, rising to 28.7k on the 22nd, reaching the final stage of this wave of market.

From this case we can also see BTC’s ability to absorb and withstand large-scale shipments.

The recent 24-hour trading volume of BTC is about 400,000 BTC. Nearly 10,000 BTC may seem like a lot, but it only accounts for 2.5% of the daily trading volume.

In the current cycle, the block output of BTC miners is 6.25 BTC, and the daily output is about 900 BTC, which means the output in more than 10 days is nearly 10,000 BTC. In addition, the current stock of BTC is 19.33 million, and the shipment volume accounts for about 0.5% of the total.

Of course, before this batch of shipped BTC is hoarded by long-term holders, market liquidity will definitely reach a lower equilibrium point in price due to the addition of these BTC.

In general, such large-scale BTC sell-offs will put pressure on BTC's short-term price, but in the long run, it will help diversify BTC holdings and open up space for further development of BTC.