Was this the btc that Trump was hoping he could convert to a SBR? Have the dems decided to try to sabotage the potential SBR the seized funds would form, by selling it before the inauguration? Does this firesale reduce the possibilty of a Strategic Bitcoin Reserve?

Am I barking up the wrong tree?

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It's part of that stash yes, but not the entire amount, wouldn't be the first time they've sold off Bitcoin from forfeiture, perhaps it was in the works for some time, and they just want to wrap it up before Trump takes office. Even if this is dumbed they'll still over 100 000 BTC, but it would mean China is the largest government holder then