- The US government plans to auction off $118 million worth of seized Bitcoin on January 8th, representing just 0.01% of Bitcoin’s total supply.
- This auction is small compared to recent Bitcoin outflows and previous government auctions, which had little market impact.
- With the auction being a tiny fraction of daily trading volumes, analysts believe Bitcoin prices will remain steady despite the government sell-off.
The U.S. government plans to auction off $118 million worth of seized Bitcoin. This sale represents a tiny fraction of Bitcoin’s total market capitalization and is unlikely to significantly impact prices.
The Auction Details
The U.S. government will auction 2934 Bitcoin on January 8 following the sentencing of two criminals involved in money laundering.
The auctioned Bitcoin only represents 0.01% of Bitcoin’s total supply. It pales in comparison to recent outflows from the Grayscale Bitcoin Trust, which total over $4 billion worth of Bitcoin in the past week alone.
Previous Government Auctions Had Little Market Impact
The government has auctioned seized crypto before without major price impacts. For example, venture capitalist Tim Draper purchased 30,000 Bitcoin from a government auction in 2014. The upcoming auction is small compared to the government’s total Bitcoin holdings from seizures. In total, the government holds an estimated 194,188 BTC worth over $7.7 billion.
Bitcoin Prices Likely to Remain Steady
Given the relatively small number of Bitcoin being auctioned compared to daily trading volumes, most analysts believe the auction will have little impact on Bitcoin’s market price. The government’s sell-off represents just a tiny fraction of total supply.