Highlights:
- The US government transferred $2B in Bitcoin, likely linked to Silk Road assets.
- The transfer followed Trump’s pledge not to move US Bitcoin, sparking market concerns.
- Bitcoin’s value dropped nearly 4% in response, mirroring past reactions to government BTC moves.
According to data from blockchain analysis platform Arkham Intelligence, a wallet linked to the US government transferred 29,800 Bitcoin worth $2 billion to an unidentified address with no prior transaction history on July 29. The address subsequently sent 19,800 BTC (about $1.3 billion) and 10,000 BTC (about $670 million) to two different addresses. This move has raised concerns among investors about a potential sell-off.
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These BTC appear to be tied to funds confiscated by the US Department of Justice (DOJ) from the now-defunct dark web market Silk Road. Late last year, a US appeals court issued a mandate finalizing the forfeiture of 69,370 BTC and other crypto linked to Silk Road.
Arkham analysts speculated that the transfer of 10,000 BTC was likely a deposit to an institutional custody or service provider.
UPDATE: The U.S. Government has split 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
Historically, significant Bitcoin movements often precede asset sales, triggering market jitters. This time was no different, as Bitcoin’s value dropped nearly 3.8% to $66,642 over the past 24 hours.
This incident mirrors past market reactions to significant government Bitcoin movements. Last month, news of the German government transferring Bitcoin to crypto exchanges led to a temporary price drop. The country sold its entire stash of nearly 50,000 BTC over a few weeks. The US government currently holds $12 billion in Bitcoin, most of which comes from confiscating and seizing crypto assets from illicit sources.
Transfer Follows Trump’s Bitcoin Stockpile Plan and Lummis’ Legislation Proposal
The timing of this transfer is notable. It comes just two days after former President Donald Trump, the Republican candidate for the 2024 election, announced his plan to establish a “strategic national Bitcoin stockpile” if elected.
At the Bitcoin 2024 conference in Nashville, Trump promised the US government would not sell any of its currently-held Bitcoin. He also declared that he would make the US the “crypto capital of the world” by rolling out a series of crypto-friendly policies, including firing current SEC Chair Gary Gensler. In addition to Trump’s promise, Wyoming Senator Cynthia Lummis announced new legislation aimed at making Bitcoin a strategic reserve asset of the United States.
Crypto Community Reacts to US Govt’s $2B Transfer in BTC
The crypto community reacted swiftly, with many criticizing the timing of the move.
Galaxy Digital CEO Mike Novogratz said:
“Tone deaf anyone??? Moving Silk Road BTC two days after Trump’s pledge to not move them is just dumb!!!!”
Similarly, Digibuild CEO Robert Salvador claimed that the Biden-Harris administration is “dumping Bitcoin” two days after Trump’s speech to “hurt the price and investors.”
Adding to the speculation, Dennis Porter, co-founder of the Satoshi Action Fund, stated:
“I cannot officially confirm but I had heard word that there is now an internal government struggle over who in the government will hold the Bitcoin. Days after hearing this, $2,000,000,000 in BTC was transferred to a new wallet.”
Meanwhile, several crypto commentators suggest the transfer may be related to a July 1 agreement between the US Marshals Service and crypto exchange Coinbase, in which they signed a deal to “safeguard” US government crypto assets.
You guys freak out any time large coins move.
Remember that US Marshall’s *just* signed with Coinbase Prime to start custody of government held digital assets? https://t.co/wwxoFepggH pic.twitter.com/WlroZvrblm
— Adam Cochran (adamscochran.eth) (@adamscochran) July 29, 2024
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