US Government Transfers 40,000 Bitcoin, Will It Affect The Price?

Jake Simmons

1 year ago

2 mins read

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The Bitcoin price is under heavy pressure due to fears of “sticky” inflation and yesterday’s ultra-hawkish comments from U.S. Federal Reserve (Fed) chairman Jerome Powell. At press time, BTC was trading just above $22,000 and continued to show no strength yet.

At this time comes news that the US government is in the process of selling off some of its seized Bitcoin. Blockchain security firm PeckShield first reported that addresses associated with the US government transferred 49,000 BTC worth $1.08 billion today, which were seized from the Silk Road hacker.

Of that total, 9,826 BTC worth $217 million were transferred to Coinbase and 39,175 BTC worth $867 million were transferred to two new addresses. On-chain data provider Glassnode confirmed this, adding that most (so far) appear to be internal transfers, but approximately 9,861 BTC were sent to a Coinbase cluster.

Glassnode also shared the chart below, displaying the estimated Bitcoin balance of the US government.

Bitcoin seized by US government | Source: Twitter @Glassnode

PeckShield also stated that about 51,351.9 BTC of Silk Road Crime Proceeds were seized by the US government in November 2021 and March 2022 and clustered into 2 addresses.

The seized Bitcoin from founder Ross Ulbricht’s legendary darknet platform “Silk Road” make up a large portion of the US government’s holdings. While Ulbricht was sentenced to life in prison without parole in 2015, he was ordered to pay $183 million in restitution related to Silk Road’s total sales.

Before the marketplace was shut down, Silk Road experienced a hack in which 69,370 BTC were stolen. The government seized these Bitcoins in November 2020, and Ulbricht relinquished all rights to the Bitcoin and used them to pay the restitution.

Will The US Government Impact The Bitcoin Price?

A Bitcoin dump by the US government does not seem very likely according to current information. The 9,826 BTC presumably sent to Coinbase is too little to affect the price. The other funds moved appear to be internal transfers only.

Therefore, a warning of a dump is by no means appropriate. Moreover, it should be emphasized that the U.S. government usually chooses a different way to sell seized Bitcoin. Usually, the sale is done through General Services Administration (GSA) auctions, where confiscated Bitcoins are auctioned off in lots to willing buyers without affecting the price.

At press time, the BTC price had to fight off the macro economic headwinds and was trading at $22,025. The $21,900 price level continues to serve as the key support for BTC.

Should the level be breached to the south, a new lower low would be in play. Of particular importance then becomes the price level around $21,600 to write a higher low and maintain the uptrend in the 1-day chart.

Bitcoin BTC USD — BTC price, 4-hour chart | Source: BTCUSD on TradingView.com

Featured image from Medium, Chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

You can engage with his latest takes on Twitter: @realJakeSimmons.

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