Here’s Why the U.S. Government Made a $2B Bitcoin Transfer

• A US Government BTC wallet has recently transferred some of its holdings.
• The United States government is one of the largest Bitcoin holders.
• Bitcoin is currently wavering below its all-time high (ATH) following a flash crash.

The ongoing crypto market rollercoaster has given rise to resurgent activity across many influential wallets characterized by asset transfers and major liquidations. Following months of dormancy, some of the top Bitcoin holders have recently sprung into action, drawing attention to notable movements of their assets and their subsequent impact on prices.

As one of the largest holders of Bitcoin, the United States government is no exception, joining the ranks with significant asset transfers. But why is the US moving Bitcoin?

US Government Bitcoin Transfer

According to Arkham Intelligence data on Tuesday, April 2, a wallet labeled ‘U.S. Government: Silk Road DOJ Confiscated Funds’ containing over 30,100 bitcoins has recently surged with transfer activity.

The transactions, worth approximately $2 billion at press time, commenced with a 0.001 BTC test transfer to a Coinbase Prime wallet, valued at ($65), before moving a total of 1,999 BTC to the same address. The transfers then continued with an additional transfer of 29,800 BTC to a separate address, valued at approximately $1.9 billion.

While the government transfer has raised questions about the government’s motive, the 2,000 BTC follows a notice of forfeiture filed earlier this year , suggesting efforts to complete the proposed sale. On January 10, 2024, the United States Department of Justice initiated proceedings for a two-part sale of 2,934 BTC, confiscated from two now-convicted dark web marketplace drug traffickers, Ryan Farace and Sean Bridges. 

The US government’s transfer of Bitcoin to Coinbase mirrors its past use of the exchange for asset sell-offs, such as the 2022 sale of 9,861 BTC. This further reinforces the possibility of its efforts to finalize the sale of some of its Silk Road-linked holdings.

Despite its weight, the spotlighted 2,000 BTC transfer is only a fraction of the government’s multi-billion dollar bitcoin holdings.

US as One of the Largest BTC Holders

With a portfolio boasting over 200,000 BTC, the United States government currently sits among the top largest Bitcoin holders .

Unlike many whales whose portfolios consist of purchased BTC, the majority of the US government’s stash consists of assets seized from convicted illicit actors. Some of the government’s notable seizures include the August 2023 Silk Road 69,370 Bitcoin confiscation , which included other Bitcoin assets, including Bitcoin Cash (BCH), Bitcoin gold (BTG), and Bitcoin SV (BSV).

Criminal confiscations, including the October 2023 seizure of 94,643 BTC related to the Bitfinex hack in which 120,000 BTC were stolen in 2016, are also a part of the government’s over 200,000 BTC stash.

The US government is surpassed by Satoshi Nakamoto , who owns between 750,000 and 1,100,000 BTC, Binance , with 643,546 BTC, Grayscale Investments, with 335,153.8 BTC, and MicroStrategy, whose portfolio contains over 214,246 BTC.

On the Flipside 

• The government’s ‘seized and keep’ approach has often raised eyebrows across the industry, particularly considering its broader unfriendly approach to the crypto industry.
• At press time, Bitcoin is trading at $66,477, down approximately 9.8% from its all-time high price of $73,738.
• On Tuesday, April 2, Bitcoin suffered a flash price crash of over 5%.

Why This Matters

Frequent activity in whale wallets, like the United States government’s, is rare, making transfers like this highly conspicuous. Additionally, factors like the ongoing downward trend across the industry and heightened market sensitivity further add significance to major asset movements.

Read more about these recent comments by Jim Cramer:
Cramer Labels Bitcoin Super Overbought: Is BTC Topping Out?  

Discover more about the impressive inflows recorded in the industry this past week:
Bitcoin Leads $862M Crypto Inflows Recovery as Halving Nears