Bitcoin Journal CEO David Bailey has ignited hypothesis over whether or not the U.S. Division of Justice (DOJ) has been promoting Bitcoin seized from the notorious Silk Highway market, doubtlessly impacting the current market downturn.
In a put up on X on March 10, Bailey steered that the DOJ’s Bitcoin gross sales could have been ongoing regardless of former President Donald Trump’s pro-Bitcoin stance, contributing to Bitcoin’s worth decline.
If the DOJ has been liquidating America’s bitcoin with haste (in defiance of the President) ever since getting courtroom approval to take action 3 months in the past… then Bitcoin’s worth motion makes good sense.
— David Bailey
$0.85mm/btc is the ground (@DavidFBailey) March 10, 2025
Whereas some dismissed the thought, arguing that the DOJ’s holdings have been inadequate to considerably transfer the market, others pointed to broader macroeconomic components affecting Bitcoin’s worth.
Nonetheless, the hypothesis raised issues over the potential implications of government-controlled Bitcoin reserves and the administration’s broader financial insurance policies.
Including one other layer to the dialogue, Bailey had beforehand floated the thought of Trump enabling Bitcoin funds for his proposed “Gold Card” to draw overseas funding.
President Trump ought to settle for Bitcoin paid into the SBR in alternate for the “Gold Card”
Many elites in rising markets need to dwell within the U.S. however battle to maneuver $5M in USD out of their dwelling international locations. Bitcoin gives a less complicated, safer, and extra discreet answer.— David Bailey
Is the DOJ Secretly Promoting Bitcoin?
Bailey’s concept stems from a U.S. courtroom’s December 2024 ruling granting the DOJ permission to liquidate 69,370 BTC seized from Silk Highway.
The DOJ has traditionally executed such gross sales in bulk auctions, however the lack of transparency across the timeline for these liquidations has left room for hypothesis.
Bailey’s March 10 put up on X fueled issues that the DOJ could have been aggressively promoting Bitcoin over the previous three months.
When one person requested how the group might stop these gross sales, Bailey stated cryptically, “Engaged on it.”
One other person steered ready for David Sacks, the White Home’s Crypto Czar, to substantiate the gross sales, to which Bailey replied, “30 days.”
Whereas no official affirmation has surfaced, the dialogue has intensified amid ongoing Bitcoin worth volatility.
The cryptocurrency fell to $80,052 on March 10, a 7% decline from the day past.
Some analysts argue that whereas DOJ gross sales could have a short-term influence, macroeconomic situations—together with inflation reviews and Treasury bond actions—play a bigger function in Bitcoin’s worth fluctuations.
Including to the controversy, Actual Imaginative and prescient analyst Jamie Coutts famous that Bitcoin’s worth developments align intently with company bond spreads and Treasury bond volatility.
Bitcoin is like enjoying a sport of Hen with central banks.
Whereas my framework is popping bullish because the greenback plunges, two metrics nonetheless increase alarms: Treasury Bond volatility (MOVE Index) and Company Bond spreads. On this thread, I'll clarify how these components work together… pic.twitter.com/gWaGlVyo2A— Jamie Coutts CMT (@Jamie1Coutts) March 10, 2025
He warned that increasing bond spreads might additional stress threat property like Bitcoin.
Nevertheless, Coutts remained optimistic, pointing to rising nation-state Bitcoin adoption, anticipated ETF inflows, and Michael Saylor’s MicroStrategy doubtlessly buying as much as 200,000 BTC this 12 months.
Strategic Bitcoin Reserve: A Double-Edged Sword?
The hypothesis over DOJ gross sales comes amid broader uncertainty surrounding the U.S. authorities’s Bitcoin coverage.
Trump’s current govt order establishing the Strategic Bitcoin Reserve was initially seen as a bullish sign for institutional adoption. Nevertheless, the coverage’s particulars recommend a extra complicated actuality.
In keeping with David Sacks, the Strategic Bitcoin Reserve might be constructed solely from Bitcoin seized in felony and civil forfeiture circumstances.
“The federal government is not going to purchase further property for the stockpile past these obtained by way of forfeiture proceedings,” Sacks clarified on X.
This revelation dashed hopes of a government-driven Bitcoin accumulation technique, because the reserve can be fashioned solely from beforehand seized property relatively than new purchases.
Only a few minutes in the past, President Trump signed an Government Order to ascertain a Strategic Bitcoin Reserve.
The Reserve might be capitalized with Bitcoin owned by the federal authorities that was forfeited as a part of felony or civil asset forfeiture proceedings. This implies it…— David Sacks (@davidsacks47) March 7, 2025
Moreover, whereas the order prevents the sale of Bitcoin from the reserve transferring ahead, it doesn’t make clear whether or not previous liquidations, together with these authorized for Silk Highway holdings, had already taken place.
This lack of readability has led to additional hypothesis that the DOJ might have liquidated vital parts of Bitcoin earlier than the manager order took impact.
In a associated growth, some consultants have steered that Trump might bolster the reserve by liquidating different government-seized crypto property.
In keeping with Arkham Intelligence knowledge, as of March 10, the federal authorities held roughly 60,850 Ethereum ($125 million), 122 million Tether, and different property resembling Binance Coin (BNB) and Wrapped Bitcoin.
If liquidated, these property might yield an extra 5,000 BTC.
Wanting forward, merchants are intently watching upcoming financial reviews, together with the discharge of the Shopper Value Index (CPI) on March 12 and the Producer Value Index (PPI) on March 13.
These indicators might present additional perception into inflation developments and the Federal Reserve’s potential financial coverage shifts, that are vital for Bitcoin’s near-term worth route.
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