Will the US Government Sell 10,000 Bitcoin? Experts Weigh In on the Recent Transfer

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Big moves happening! On August 14, the U.S. government transferred about 10,000 Bitcoin, valued at roughly $594 million, to Coinbase’s Prime deposit wallet as per Arkham Intelligence report. While many thought the transfer was for custody purposes due to a new partnership between the Marshals Service and Coinbase, Johnsson believes the Bitcoin has either already been sold or will be sold soon.

Is this a preview of how future US governance will act?

Here’s the real truth behind the US govt’s move!

Is a Sale Imminent?

Finance lawyer Scott Johnsson believes this transfer is more than just safe-keeping. He suggests that the U.S. Marshals Service (USMS) might be preparing to sell these Bitcoins. According to Johnsson, when Bitcoin hits commingled addresses (where assets are pooled together), it often indicates a sale. This theory will be confirmed or disproved in the DOJ’s Asset Forfeiture Program FY2024 report, expected in January.

Ryan Lee, chief analyst at Bitget Research, also believes the 10,000 Bitcoins have likely not been sold. He explains that since big holders, or whales, can greatly influence Bitcoin’s price, investors often watch their transactions to anticipate possible selling pressure.

All About the Silk Road: Trade or Custody?

There’s debate about whether this transfer is a move to trade Bitcoin or just to store it securely. Some analysts argue that selling such a large amount could significantly impact Bitcoin’s market due to liquidity issues. Others believe the transfer might simply be a precautionary custody measure, as Coinbase is a trusted custodian for large-scale assets.

The Bitcoin transferred was originally seized from the Silk Road, a dark web marketplace shut down in 2013. The recent transfer of 10,000 Bitcoin, adds to a prior transfer of 29,800 BTC in July 2024, valued at nearly $2 billion. With an estimated total holding of 203,000 BTC worth around $12 billion, the U.S. stands as the largest Bitcoin holder globally. The influx of this substantial supply into the market might disrupt Bitcoin’s price and may pose a threat to any potential bullish breakout.

The Silk Road allowed for the trade of illegal goods and its founder, Ross Ulbricht, is serving life sentences. This seizure added a substantial amount to the government’s Bitcoin holdings, making them the largest state holder of Bitcoin globally.

Political Implications

Political figures, including former President Donald Trump, have weighed in on the Bitcoin holdings, with Trump promising not to sell them if he is re-elected. The recent transfer adds to the ongoing debate about the government’s role in the crypto market and its impact on investor sentiment.