Nine years ago, on November 5th, 2015, the U.S. Marshals Service held a very public auction of 44,000 Bitcoins. These Bitcoins were seized from Ross Ulbricht, who created Silk Road, an infamous black market website. At that time, Bitcoin was selling at about $400 per coin, which translated to roughly $17.6 million. But as we know, today, the price of these 44,000 Bitcoins significantly exceeds $3 billion, which clearly indicates the growth of Bitcoin in the stock market during the past decade.
A Missed Fortune: The Impact of Bitcoin’s Price Surge
The evolution of Bitcoin from $400 in 2015 to $68,000 today is one of the greatest moves in the history of financial assets. Had the US government remained a holder of those Bitcoins, the investment is today worth almost 170 times its original value. The decision to sell them in an auction may now appear rash, given that Bitcoin has been revealed to have great potential in long-term being a store of value.
The Silk Road takedown and subsequent selling of Bitcoins by the government of the United States was a significant moment in the history of cryptocurrency and law enforcement. Silk Road was an internet marketplace that primarily dealt with criminal commodities and services before being shut down by the FBI in the second half of 2013. The bust on Silk Road made many people aware of Bitcoin, which was the most used currency in Silk Road and was still in its infancy at the time of the closure.
Long-Term Lessons for Cryptocurrency Management
The sale of the Silk Road Bitcoins underscored a broader lesson for governments worldwide: such as cryptocurrencies are characterized by significant variations in terms of their relative value. As the market evolves, many governments start reconsidering their policies on the management of seized cryptocurrencies.
Over the last decade, the trend has shifted for governments to think about the ability of these assets to generate future value before they dispose of them. For instance, some investors have decided to avoid trading in digital assets and instead hold them for long-term gains, just like stocks.
A Historical Perspective on Bitcoin’s Growth
The US government’s decision to sell 44,000 Bitcoins in 2015 shows how far the cryptocurrency market has come. Currently, Bitcoin is one of the most popular and valuable cryptocurrencies that has evolved from being considered an experimental and outsider currency to an important financial instrument. This recalls what crypto can offer, along with the challenges that governments have in managing digital resources. With Bitcoin’s progression, that historical event remains a prime example of how valuable asset creation and management are in the age of information.
