Bitcoin experienced a 2.5% drop on Wednesday, settling at $59,100, following the U.S. government’s decision to transfer more of its Silk Road-related Bitcoin holdings to Coinbase Prime. This move was highlighted by the on-chain analysis platform Arkham Intelligence, which pointed out that 10,000 BTC, valued at $593 million, had been relocated. The specific wallet, bc1ql, received the BTC from a known U.S. government wallet two weeks prior, before sending it to wallet 33J, a deposit wallet on Coinbase Prime.
Current State of U.S. Government’s Bitcoin Holdings
Arkham Intelligence revealed that the U.S. government’s Bitcoin wallet still contains 203,239 BTC, amounting to $12 billion. The majority of this Bitcoin was confiscated from the hacker responsible for the downfall of the darknet marketplace Silk Road in 2021. At that time, the seizure of 50,000 BTC marked the largest financial confiscation ever carried out by the Department of Justice. However, this record was surpassed months later when the DOJ seized 94,600 BTC from Heather ‘Razzlekhan’ Morgan and her spouse, Ilya Lichtenstein, who jointly breached the security of the Bitfinex crypto exchange.
Government’s Selling Strategy and Previous Promises
The action of transferring Bitcoin to Coinbase suggests that the government is actively selling its BTC holdings, in contradiction to the previous promise made by Donald Trump. Trump had vowed to hold onto the government’s existing coins indefinitely if elected president in November. This ongoing selling strategy is also accompanied by the redistribution of BTC to Mt. Gox creditors. Recently, Arkham flagged a significant $2 billion Bitcoin transfer on Tuesday, involving creditors’ coins being moved from BitGo’s blockchain wallet.
The U.S. government’s decision to continue selling its Bitcoin holdings indicates a departure from previous promises and signifies its intention to actively manage and utilize these digital assets. The movements of large amounts of BTC to platforms like Coinbase Prime highlight the evolving landscape of cryptocurrency ownership and distribution within government entities. It remains to be seen how these actions will impact the overall cryptocurrency market and the government’s approach to digital assets in the future.
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