With continuous volatility, the transfer of approximately $4 million worth of Bitcoin to Coinbase by the US government has sparked concerns about possible market repercussions.
The US government, one of the biggest Bitcoin holders in the world, transferred precisely 58.742 BTC ($3.96 million) from its internal wallet to Coinbase Prime, according to on-chain analyst Spot Onchain.
Bitcoins were seized in 2021 when Ryan Farace and his father, Joseph Farace, were found guilty of exploiting the dark web to sell Xanax pills and engage in money laundering crimes.
While his father was sentenced by US District Judge Deborah K. Chasanow in January 2024, Ryan Farace was first found guilty in 2018.
What Is the US Government’s Bitcoin Holding Amount?
This recent Coinbase deposit is not an isolated instance.
The United States government has a sizable holding of $14.6 billion in various digital assets, comprising $14.21 billion in Bitcoin plus noteworthy quantities of Ethereum, Bitcoin Cash, and WBTC.
Three weeks ago, the US government completed a much larger transfer of 3,940 Bitcoin to Coinbase Prime, the exchange’s institutional trading platform. This concerned money seized from narcotics trafficker Banmeet Singh, who was found guilty, in the beginning of 2024.
Singh was extradited to the US in 2023 after being arrested in London in 2019 on charges of distribution. Following his conviction, he handed over 8,100 bitcoins to US authorities.
International Governmental Bitcoin Sales
The actions of the US government line up with recent sales and transfers of Bitcoin from other organizations.
For example, this week the now-defunct Mt. Gox exchange sent over $3 billion in Bitcoin to an anonymous address, indicating a next-batch repayment plan for its creditors. This came after the price of Bitcoin fell below $55,000 earlier in July due to the exchange transferring over 47,000 BTC ($2.6 billion) to a new wallet.
Between June 19 and July 12, the German government sold over 49,800 bitcoins, which coincided with the cryptocurrency’s decline to as low as $53,000.
Market analysts predict that the US government’s transfer, despite the huge amount involved, won’t have a big effect on the price of Bitcoin.
The transferred value is less than 1% of the $44 billion in 24-hour trading volume for Bitcoin, according to CoinMarketCap data.
This optimistic view is also supported by the Crypto Fear and Greed Index, a widely used indicator of market sentiment.
With the index around 71, investors appear to be acting in a “greedy” manner. This indicates that market participants continue to have a bullish attitude about cryptocurrencies, notwithstanding recent government moves.
