TLDR
A U.S. government-associated crypto wallet transferred $2 billion worth of bitcoin to an unidentified wallet on July 29, 2024.
The transferred bitcoin is believed to be part of funds previously seized from the dark web market Silk Road.
The transfer was followed by a drop in Bitcoin’s price, falling below $67,000.
The U.S. government still holds over $12 billion in seized bitcoin, according to Arkham Intelligence.
The transfer comes shortly after Donald Trump’s promise to create a “strategic national bitcoin stockpile” if re-elected.
A wallet associated with the U.S. government transferred approximately $2 billion worth of bitcoin on July 29, 2024. The transfer, involving nearly 28,000 bitcoins, was tracked by blockchain analytics firm Arkham Intelligence and is believed to be connected to funds previously seized from the now-defunct dark web marketplace, Silk Road.
UPDATE: The U.S. Government has split the $2B Bitcoin into two addresses:
10,000 BTC ($669.35M): bc1qlap8hkt9genaljz5nt2zlehhudx63zlahr2zek
19,800 BTC ($1.33B): bc1qngydl7hmgdtmuqjmtsyj3pcwszv0yn5mj6kz4c
We 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 massive transfer occurred in two stages. Initially, the bitcoin was moved to an unidentified wallet. Shortly after, it was split into two separate addresses: one containing 19,800 bitcoin (valued at about $1.3 billion) and another holding 10,000 bitcoin (worth approximately $670 million). Arkham Intelligence suggested that the latter transfer might represent “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 near $70,000 earlier in the day, tumbled below $67,000 following the transfer. This 5% drop from the day’s high sparked concerns among investors about potential selling pressure from government-held bitcoin.
The timing of this transfer is particularly noteworthy, coming just two days after former U.S. President Donald Trump’s appearance at the Bitcoin 2024 conference in Nashville.
During his speech, Trump promised to create a “strategic national bitcoin stockpile” if re-elected, a statement that had initially buoyed market sentiment.
The U.S. government’s bitcoin holdings stem from various seizures, with the Silk Road case being one of the most significant. In late 2023, a U.S. appeals court finalized a mandate formalizing the forfeiture of 69,370 bitcoin and other cryptocurrencies connected to Silk Road. The government’s crypto portfolio, even after this transfer, still holds more than $12 billion in bitcoin, according to Arkham Intelligence.
This is not the first time the U.S. government has moved 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 handling of seized cryptocurrencies has been a topic of interest and debate. While some view these holdings as a potential windfall for the U.S. Treasury, others express concerns about the market impact of large-scale selling. The government’s approach to managing and potentially liquidating these assets could have significant implications for the broader cryptocurrency market.
Adding another layer of 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, coupled with his promise of a national bitcoin stockpile, highlights the increasing prominence of cryptocurrency issues in U.S. political discourse.
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