The US government moves 19,800 BTC worth $1.92B to Coinbase Prime, sparking market unrest.
The Bitcoins transferred were part of the 50,000 BTC seized in the Silk Road case.
The US Marshal Services have partnered with Coinbase Prime to safeguard its digital assets.
When the US government moves billions in BTC, it sends shockwaves throughout the market. As one of the largest Bitcoin holders, the US government recently moved 19,800 BTC to Coinbase Prime. The transfer was initiated from “U.S. Government: Silk Road DOJ Confiscated Funds” to a Coinbase Prime wallet and caused the price of Bitcoin to decline.
According to Arkham Intelligence, the US government transferred Bitcoin worth $1.92 billion from a wallet that holds BTC seized from the Silk Road Marketplace. The funds were first transferred to a new wallet address before reaching Coinbase Prime. The transfer likely suggests that the US government may sell Bitcoin, sparking investor panic and causing a 2.2% drop in Bitcoin prices at the time. These Bitcoins were part of the 50,000 BTC seized from James Zhong, who was arrested in 2022 and later pleaded guilty to wire fraud in the Silk Road marketplace case.
According to Spot On Chain, in this year alone the US government transferred $2.49B worth to Coinbase. They also spotted that most of the transfers are not for sales but custody actions. In June 2024, the US Marshals Service, responsible for managing seized cryptocurrencies, partnered with Coinbase Prime to securely store and trade the government’s digital assets.
Whenever the government moves on BTC, investors could expect the prices to plunge. This June, German government started a massive selloff of about 50,000 BTC ($3.26B), confiscated from an illegal platform called Movie2k. This selling spree lasted for a few weeks, during which Bitcoin dropped from $62,000 to around $55,000. It was only after the German government sold their BTC that the BTC price rebounded to the $65,000 range.
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