TLDR
- A U.S. government-associated crypto wallet transferred $2 billion worth of bitcoin on July 29, 2024.
- The transferred bitcoin is believed to be part of funds previously seized from the dark web market Silk Road.
- Following the transfer, Bitcoin’s price dropped below $67,000.
- The U.S. government still holds over $12 billion in seized bitcoin, according to Arkham Intelligence.
- This transfer occurred shortly after Donald Trump’s pledge to establish a “strategic national bitcoin stockpile” if re-elected.
An estimated $2 billion worth of bitcoin was transferred by a crypto wallet linked to the U.S. government on July 29, 2024. The significant transfer, involving close to 28,000 bitcoins, was monitored by blockchain analytics company Arkham Intelligence. It is speculated that these funds are related to assets confiscated from the now-defunct Silk Road dark web marketplace.
UPDATE: The U.S. Government has divided the $2B Bitcoin into two addresses:
10,000 BTC ($669.35M): bc1qlap8hkt9genaljz5nt2zlehhudx63zlahr2zek
19,800 BTC ($1.33B): bc1qngydl7hmgdtmuqjmtsyj3pcwszv0yn5mj6kz4cWe believe this represents a 10,000 BTC deposit to an institutional… https://t.co/0aULBXGd8P pic.twitter.com/RTwtaqvMmM
— Arkham (@ArkhamIntel) July 29, 2024
The substantial transaction took place in two stages. Initially, the bitcoin was transferred to an undisclosed wallet. Following that, it was split into two separate addresses: one holding 19,800 bitcoin (valued at around $1.3 billion) and another containing 10,000 bitcoin (worth approximately $670 million). Arkham Intelligence proposed that the latter transfer could potentially signify “a deposit to an institutional custody/service.”
This significant movement of funds had an immediate impact on the cryptocurrency market. Bitcoin’s price, which had been hovering close to $70,000 earlier that day, plummeted below $67,000 post-transfer. The 5% decline from the day’s peak raised concerns among investors regarding potential selling pressure from government-held bitcoin.
The timing of this transfer is particularly noteworthy, occurring just a couple of days after former U.S. President Donald Trump’s appearance at the Bitcoin 2024 conference in Nashville.
During his speech, Trump pledged to establish a “strategic national bitcoin stockpile” if re-elected, a statement that initially boosted market sentiment.
The U.S. government’s bitcoin holdings originate from various seizures, with the Silk Road case being a significant one. In late 2023, a U.S. appeals court issued a mandate finalizing the forfeiture of 69,370 bitcoin and other cryptocurrencies associated with Silk Road. Even after this recent transfer, the government’s cryptocurrency portfolio retains over $12 billion in bitcoin, as per Arkham Intelligence.
This isn’t the first instance of the U.S. government moving large amounts of seized cryptocurrency. In April, a government crypto wallet sent nearly 2,000 BTC to a Coinbase Prime hot wallet. This transfer was linked to the U.S. Marshals Service’s $32.5 million contract with Coinbase for custodial services.
The government’s management of confiscated cryptocurrencies has been a subject of interest and discussion. While some view these holdings as a potential financial gain for the U.S. Treasury, others express concerns about the market impact of large-scale sales. The government’s strategy in handling and potentially selling these assets could have significant repercussions on the broader cryptocurrency market.
Adding complexity to the situation, Trump reiterated over the weekend his willingness to commute the sentence of Silk Road founder Ross Ulbricht if re-elected president. This statement, alongside his commitment to a national bitcoin stockpile, underscores the increasing prominence of cryptocurrency matters in U.S. political conversations.
Hot Take
Will the transfer of $2 billion worth of bitcoin by a U.S. government-associated wallet impact the cryptocurrency market in the near future? Stay tuned for potential developments.
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