The US government moved $1.92 billion of Bitcoin into new wallets, $963 million of which went immediately to Coinbase. These assets came from the Silk Road seizure, so the US can legally sell them all.
Community members are concerned that President Biden is attempting to sell off the US supply before Trump’s inauguration, hampering his plans to create a Bitcoin Reserve.
The US Bitcoin Reserve
According to data from the on-chain intelligence platform Arkham, the US government moved Bitcoin worth $1.92 billion into new wallets on Monday, November 2. These assets were split into two new wallets, one of which subsequently moved $963 million in BTC to Coinbase.
These bitcoins came from Silk Road seizures, which the US government can legally sell, prompting fears of a massive dump:
“Is the government planning to sell Bitcoin before Trump takes office? Outgoing administrations should not undermine the incoming President, as the people have already voted them out,” said Carl B. Menger, an industry commentator.
Specifically, industry rumors fear that President Joe Biden is using his lame-duck period to deliberately hamstring President-elect Donald Trump. As a campaign promise, Trump swore to create a US Bitcoin Reserve, beginning with the federal government’s substantial holdings.
The US is currently one of the largest BTC holders due to its continuous crackdown on illegal entities and dark web criminal groups. These holdings can potentially help Trump establish a national Bitcoin reserve when he takes office in January without taking significant additional funds from the economy.
However, even though Trump won the election, crypto analysts have theorized that Biden could use his remaining time in power to sell off much of the US Bitcoin supply. This would hinder Trump’s ability to create a Reserve. Worryingly, Biden has used this strategy in other policy sectors, giving billions to Ukraine to forestall Trump from changing US policy.
Nonetheless, the crypto community does not seem overly concerned. Four months ago, the US government prepared to sell $600 million in Bitcoin, and markets plunged. Yet, BTC recovered and entered a bullish phase following increased institutional funding.
Similarly, since these transfers were first publicized, the price of Bitcoin declined slightly. However, its value began rising shortly afterward. So, long-term HODLers are still confident in Bitcoin’s bullish prospects despite any liquidation rumors. This is evident in the actions of public firms, as MicroStrategy and MARA have still continued to purchase more BTC.
Bitcoin (BTC) Price Performance. Source: BeInCrypto
Regardless of these events, Trump will likely create a Reserve with whatever Bitcoin remains in federal custody. Also, it will be extremely difficult for Biden to sell it all by January. Besides, several corporate whales are on standby to purchase these assets themselves.
