Original text: 21shares

Compiled by: Katie Gu | Odaily Planet Daily

Recently we released a dashboard of key Bitcoin metrics, covering the top 100 wallets holding Bitcoin. We found that among the largest holders of Bitcoin is the U.S. government. Since 2020, the U.S. government has seized at least 215,000 Bitcoins.

On March 9, 2023, approximately 49,000 Bitcoins seized by U.S. government law enforcement were moved on the chain, of which approximately 9,900 Bitcoins worth a total of $221.7 million were sent to Coinbase addresses. Therefore, we track the three largest Bitcoin wallets seized by the US government so far based on the Bitcoin Key Indicators Dashboard to predict market trends through wallet fund changes:

November 2020: 69,369 Bitcoins were linked to an anonymous criminal known as “Individual X” who stole Bitcoins from the darknet market Silk Road in 2013-14.

January 2022: 94,643 Bitcoins linked to Ilya Lichtenstein and his wife Heather Morgan. The Internal Revenue Service (IRS) accused the couple of laundering $4.5 billion in the 2016 Bitfinex hack.

March 2022: 51,326 Bitcoins were seized from James Zhong, who was convicted of wire fraud for stealing Bitcoins from the dark web Silk Road in September 2012.

Note that this is a bottom-line estimate of the U.S. government’s Bitcoin holdings based on publicly available information.

Large-scale Bitcoin transactions on the U.S. government chain in recent years

1. The approximately 49,000 Bitcoins moved on the US government chain on March 9, 2023 came from the Bitcoins stolen by James Zhong from the darknet "Silk Road" in September 2012.

The funds were approximately 39,100 Bitcoins, worth $875.3 million at the time, and appeared to be an internal transfer. However, 9,900 Bitcoins worth $221.7 million at the time were sent to a Coinbase address, fueling speculation that the move could signal the sale of seized Bitcoins.

This is not the first time the U.S. government has sold seized Bitcoin. In 2013, law enforcement shut down the darknet "Silk Road" and seized 173,991 Bitcoins during the pursuit of the case, 144,336 of which came from the wallet of Ross Ulbricht, the founder of the darknet "Silk Road" market. The U.S. government auctioned these Bitcoins four times in 2014 and 2015, and venture capitalist Tim Draper purchased 30,000 of them for $18.7 million.

Figure 1: U.S. government transaction history

2. It is estimated that as of March 22, 2023, the U.S. government’s current balance of Bitcoins is 205,515, worth approximately $5.8 billion.

We estimate that as of March 22, 2023, the U.S. government owns approximately 1.06% of the circulating supply of Bitcoin. Just a year ago, the U.S. government’s Bitcoin holdings were worth just over $10 billion at their peak.

Figure 2: Cumulative U.S. Government Balances (in Bitcoin and USD)

3. By cross-referencing our findings with our previous dashboard on key Bitcoin metrics, we noticed that the U.S. government owns two of the top ten Bitcoin wallets.

The first wallet was linked to 94,643 Bitcoins seized from Ilya Lichtenstein and his wife Heather Morgan. The Internal Revenue Service (IRS) accused the couple of laundering $4.5 billion in the 2016 Bitfinex hack. The second wallet is linked to 69,369 Bitcoins seized from an anonymous criminal known as "Individual X" who stole the funds from the darknet internet market Silk Road between 2013 and 2014 .

Figure 3: Top 10 Bitcoin holders

Summarize

Amount of Bitcoins Seized: Since 2020, the U.S. government has seized at least 215,000 Bitcoins.

Recent transactions: The U.S. government transferred approximately 9,900 Bitcoins worth $221.7 million to Coinbase, sparking speculation about a potential sale.

Current Bitcoin Balance: As of March 22, 2023, the U.S. government’s Bitcoin balance is estimated at 205,515 Bitcoins, worth approximately $5.8 billion.

Largest holders of Bitcoin: As of March 22, 2023, the U.S. government controls 1.06% of the circulating supply of Bitcoin. The U.S. government accounts for two of the top ten Bitcoin wallets.

For years, people have mistakenly believed that cryptocurrencies facilitate “hidden transactions.” As a result, cryptocurrencies are often used for criminal purposes. According to Chainalysis, overall illegal activity accounted for a tiny 0.24% of total cryptocurrency volume in 2022.