A more interesting question is whether the fear of the state dumping 600000 BTC all of a sudden will cause a libertarian panic.
There are some details that have been overlooked.
1) The total amount of seized BTC is under 28000
http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX2) The target of the state's seizure may not have anything close to the 600000 BTC left
3) The state may not be able to seize the BTC because of legal or technical reasons or both.
4) The state's bureaucracy will likely tie up the BTC for years with red tape.
Nevertheless there is a case for the bear here. Fear of the state runs very high in Bitcoin community and the mere thought of the state been able to sell large amounts of BTC could be enough to start a panic. Such panic could be called the libertarian panic.