The CEO of Blockstream, Adam Back, has recently talked about the US government’s decision to sell some of its bitcoins. On X, he proposed that this action would be good for long-term Bitcoin investors and HODLers. HODLers are people who keep their investment in cryptocurrency through market fluctuations to profit from long-term value appreciation. Back’s commentary follows reports that the US started selling 30,000 BTC seized from the Silk Road.
Back is pointing out that the sale of these Bitcoins by the US government could be good news for those who are interested in holding their cryptocurrency for a long time. He elaborated that next government sales and the presumably higher printing of US dollars could turn Bitcoin into an even more attractive investment. Through the injection of more fiat currency into the economy, such actions may generate inflationary pressures, against which Bitcoin can act as a hedge. In reply, Beck humorously stated that he would have preferred to keep Bitcoin himself, thus outlining the merits of the authority’s action.
Debate over US Bitcoin sales intensifies
The discussion on the potential outcomes of the US government’s Bitcoin sales continues after Back’s optimistic view. Another user on X provided a different angle, speculating that the government’s actions might aim to suppress Bitcoin’s price or support certain Exchange-Traded Funds (ETFs). This perspective introduces a debate on the government’s objectives behind these sales. The Spot Bitcoin ETF products, which became available in January, add another layer to the market dynamics influenced by government actions.
Furthermore, the immediate impact of the government selling Bitcoin could lead to market fluctuations. While Back focuses on the long-term benefits for HODLers, the short-term market response could see volatility as the market absorbs the additional supply. This situation underscores the complex interplay between government actions and cryptocurrency markets, where various factors can influence investor sentiment and market trends.
US government sells Silk Road seized Bitcoin
In fact, the US government’s connections with Bitcoin are connected with the crackdown on the Silk Road – an underground online market. The FBI shut down the Silk Road and confiscated more than 144,000 BTC, as well as the arrest of its founder, Ross Ulbricht. After that, the US government held sales of the seized Bitcoin, the last sale notice being in January, intended to liquidate almost $130 million in Bitcoin in two lots.
The sales are part of the government’s broader strategy to manage the assets it has seized, including those from Silk Road and other sources. As of December 2023, the US government held approximately $9 billion in Bitcoin. These actions highlight the government’s significant role in the cryptocurrency market, especially concerning high-profile seizures and sales.
