- The US government sent 3,940 BTC (worth $240 million) to Coinbase’s Prime institutional platform on Wednesday.
- The Bitcoin was originally seized from a narcotics trafficker named Banmeet Singh who forfeited it in a trial in January 2024.
- The government sale adds to the wave of selling pressure on Bitcoin this month from miners and whales, as new demand for Bitcoin appears to be drying up.
The US government appears to be selling more Bitcoin, with a known federal wallet address sending another 3,940 BTC ($240 million) to Coinbase on Wednesday. The move adds to a growing wave of downward price pressure from miners and other whales.
Details of the Transfer
The transfer to Coinbase Prime, the exchange’s institutional platform, was immediately picked up by blockchain sleuths. Expert opinions were split regarding where the government obtained the transferred Bitcoin.
According to on-chain sleuth ZachXBT’s Telegram channel, the funds were part of the reclaimed Bitcoin from the Silk Road hack. After the infamous darknet marketplace shutdown in 2013, the Justice Department tracked down the hacker and seized 50,676 BTC, which the government has been selling off in batches ever since.
Aside from Silk Road, many of the government’s coins were reclaimed from 2016 Bitfinex hacker Razzlekhan in 2022. But Blockchain data platform Arkham Intelligence says the coins stolen today came from neither of those sources.
Origin of the Transferred Coins
Arkham tweeted that this Bitcoin was originally seized from narcotics trafficker Banmeet Singh and forfeited at trial in January 2024.
Banmeet Singh was a drug kingpin who pled guilty earlier this year to operating an international narcotics ring from his home for several years. As part of the plea agreement, Singh agreed to turn over $150 million worth of his crypto, now worth more thanks to Bitcoin’s price appreciation since that time.
Impact on Bitcoin Price
Much like the US government, Germany sold $170 million from its hefty $28 billion Bitcoin stash last week. Arkhams data shows that it moved tens of millions more to exchanges Kraken and Coinbase on Tuesday.
Government sales have added to a wave of sell pressure hitting Bitcoin this month from Bitcoin miners and whales, while on-chain analysis suggests that new demand for Bitcoin has been drying up. Bitcoin is trading for $60,775 as of writing, down 13% on the month.
Conclusion
The US government’s latest sale of seized Bitcoin to Coinbase adds further downward pressure on Bitcoin’s price, which has already been declining this month. The long-term impacts remain uncertain, but the short-term outlook is bearish given declining demand and increasing supply hitting the market from miners, whales, and governments.
