Bitcoin Magazine CEO David Bailey has ignited speculation over whether the U.S. Department of Justice (DOJ) has been selling Bitcoin seized from the infamous Silk Road marketplace, potentially impacting the recent market downturn.
In a post on X on March 10, Bailey suggested that the DOJ’s Bitcoin sales may have been ongoing despite former President Donald Trump’s pro-Bitcoin stance, contributing to Bitcoin’s price decline.
While some dismissed the idea, arguing that the DOJ’s holdings were insufficient to significantly move the market, others pointed to broader macroeconomic factors affecting Bitcoin’s price.
Still, the speculation raised concerns over the potential implications of government-controlled Bitcoin reserves and the administration’s broader economic policies.
Adding another layer to the discussion, Bailey had previously floated the idea of Trump enabling Bitcoin payments for his proposed “Gold Card” to attract foreign investment.
Is the DOJ Secretly Selling Bitcoin?
Bailey’s theory stems from a U.S. court’s December 2024 ruling granting the DOJ permission to liquidate 69,370 BTC seized from Silk Road.
The DOJ has historically executed such sales in bulk auctions, but the lack of transparency around the timeline for these liquidations has left room for speculation.
Bailey’s March 10 post on X fueled concerns that the DOJ may have been aggressively selling Bitcoin over the past three months.
When one user asked how the community could prevent these sales, Bailey said cryptically, “Working on it.”
Another user suggested waiting for David Sacks, the White House’s Crypto Czar, to confirm the sales, to which Bailey replied, “30 days.”
While no official confirmation has surfaced, the discussion has intensified amid ongoing Bitcoin price volatility.
The cryptocurrency fell to $80,052 on March 10, a 7% decline from the previous day.
Source: TradingView
Some analysts argue that while DOJ sales may have a short-term impact, macroeconomic conditions—including inflation reports and Treasury bond movements—play a larger role in Bitcoin’s price fluctuations.
Adding to the controversy, Real Vision analyst Jamie Coutts noted that Bitcoin’s price trends align closely with corporate bond spreads and Treasury bond volatility.
He warned that expanding bond spreads could further pressure risk assets like Bitcoin.
However, Coutts remained optimistic, pointing to growing nation-state Bitcoin adoption, anticipated ETF inflows, and Michael Saylor’s MicroStrategy potentially acquiring up to 200,000 BTC this year.
Strategic Bitcoin Reserve: A Double-Edged Sword?
The speculation over DOJ sales comes amid broader uncertainty surrounding the U.S. government’s Bitcoin policy.
Trump’s recent executive order establishing the Strategic Bitcoin Reserve was initially seen as a bullish signal for institutional adoption. However, the policy’s details suggest a more complex reality.
According to David Sacks, the Strategic Bitcoin Reserve will be built exclusively from Bitcoin seized in criminal and civil forfeiture cases.
“The government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings,” Sacks clarified on X.
This revelation dashed hopes of a government-driven Bitcoin accumulation strategy, as the reserve would be formed solely from previously seized assets rather than new purchases.
Furthermore, while the order prevents the sale of Bitcoin from the reserve moving forward, it does not clarify whether past liquidations, including those approved for Silk Road holdings, had already taken place.
This lack of clarity has led to further speculation that the DOJ could have liquidated significant portions of Bitcoin before the executive order took effect.
In a related development, some experts have suggested that Trump could bolster the reserve by liquidating other government-seized crypto assets.
According to Arkham Intelligence data, as of March 10, the federal government held approximately 60,850 Ethereum ($125 million), 122 million Tether, and other assets such as Binance Coin (BNB) and Wrapped Bitcoin.
If liquidated, these assets could yield an additional 5,000 BTC.
Looking ahead, traders are closely watching upcoming economic reports, including the release of the Consumer Price Index (CPI) on March 12 and the Producer Price Index (PPI) on March 13.
These indicators could provide further insight into inflation trends and the Federal Reserve’s potential monetary policy shifts, which are critical for Bitcoin’s near-term price direction.
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