US to sell over $1B worth of seized Bitcoin later this year

US to sell over $1B worth of seized Bitcoin later this year

Over the first quarter of 2023, the price of Bitcoin, Ethereum, and other prominent cryptocurrencies skyrocketed. Consequently, Bitcoin became, by far, the best-performing asset. Such a rise in price placed cryptocurrency at a “pivotal juncture.”

The market’s anticipation of the Federal Reserve turning dovish had its consequences. The largest asset manager in the world issued a significant warning.

Since its low in 2022, Bitcoin has almost doubled in price. Together with the top ten cryptocurrencies, BNB, XRP, Cardano, Dogecoin, Polygon, and Solana, the price of Ethereum rose sharply.

The U.S. put $215 million worth of seized bitcoin on the market last month. Therefore, Bitcoin and cryptocurrency traders are preparing for the sale of just over $1 billion worth of Bitcoin later this year.

The government paid $215,000 in transaction fees—or roughly 0.1% of the total amount sold. This led to some lighthearted comments on Twitter. It appears that U.S. traders could pick up some cost-cutting tips from the cryptocurrency community.

Sale as a part of James Zhong’s case

Remarkably, after James Zhong pleaded guilty, the U.S. government sold nearly 10,000 BTC in March. The mentioned sum is a portion of a haul of 50,000 BTC that the authorities seized after the Zhong lawsuit. Zhong confessed to wire fraud after the government accused him of manipulating the darknet market Silk Road’s transaction system in 2012. Authorities pronounced his arrest as the latest Bitcoin seizure ever. 

Court filing exposes the plans for the course of this calendar year: the U.S. decided to liquidate the remaining 41,000 BTC, which is worth $1.1 billion.

In March, the world found out that Zhong figurated in Silk Road money fraud. He unlawfully obtained about 10,000 BTC from wallets linked to a Coinbase address.

The U.S. has typically preferred selling confiscated Bitcoin and other cryptocurrencies through open auctions. Therefore, the move alarmed the market and caused analysts to scratch their heads.

The U.S. Federal Reserve’s behavior at its upcoming meeting to set interest rates in early May is being eagerly watched by the bitcoin and cryptocurrency markets.

Yuya Hasegawa, a crypto market analyst at Tokyo-based Bitbank, stated in an emailed statement that “with concerns for the U.S. banking system receding, the market’s worry is again on the Fed’s rate rise decision in May” and pointed to economic data that has surprisingly heated up in recent weeks.

Bitcoin may retest $29,000, but in order to be considered a “breakout,” it must close above that level; otherwise, it may just be another “fake-out.” Hasegawa threw in.