US Govt Shifts $600 Million in BTC to Coinbase Prime, Sparking Market Speculations

The US government made headlines recently after it sent a substantial amount of Bitcoin, almost 10,000 to the institutional arm of the Coinbase exchange

The US government recently transferred a large sum of Bitcoin, almost 10,000 to Coinbase institutional arm, Coinbase Prime. This sparked discussions throughout crypto market as many fear that it might significantly affect the price of the coin.

However, on the day of the transfer, the price of BTC briefly traded at $61,000, but quickly declined to $59k as market sentiment dwindled. But the government’s transaction happened after the drop in price suggesting that it might not be the cause of the downtrend.

According to reports from Arkham Intelligence, a sophisticated crypto transaction tracker platform, the United States government moved exactly 9,999.99 BTC, valued at approximately $593.5 million to Coinbase Prime. Notably, the Bitcoins were part of those seized by the government from the Silk Road dark web marketplace. A close look at the government’s wallet shows that it holds millions of dollars in BTC confiscated from various crime bursts over the years.

Arkham Intelligence noted that the originating wallet labeled ‘bc1ql,’ previously received 10,000 BTC from a familiar US Government wallet about 2 weeks ago, the BTC was then sent to the Coinbase Prime-affiliated deposit wallet ’33J.’

This is not the first time the US government has moved staggering amounts of seized Bitcoins. In July 2024, reports circulated that the entity transferred almost $2 billion BTC from Silk Road to a separate wallet. Also, in April, roughly 30,200 BTC, worth $2 billion, was sent to Coinbase and other exchange platforms. The timing and consistency of the transfer has raised questions among observers.

Meanwhile, speculations have been raised but the actual reasons behind the transactions are unknown at the moment. However, analysts have made wide guesses and these guesses have been divided. While most say the government is moving the BTC as part of a sell-off strategy, we suggest that it might be for custody.

Recall that in July, The U.S. Marshals Service (USMS) made a contract with Coinbase for the custody and trading of its “Class 1” large-cap crypto assets. The USMS chose Coinbase because of its long-proven track record after carefully conducting a due diligence process. Thus, the recent transfer might be moving the cryptocurrency to the new custodian.

Silk Road was a darknet black market that operated between 2011 and 2013. The dark web platform was used to distribute large quantities of illegal substances and illicit goods by several drug dealers and other unlawful sellers. In 2015, the founder Ross Ulbricht, was convicted and sentenced to life in prison by a federal judge.

Following the shutdown, in November 2021, the Department of Justice announced the arrest of James Zhong and the seizure of over 50,000 BTC stolen from the Silk Road black market between 2012 and 2014.

Arkham Intelligence data show that the US government still holds over 203,000 BTC, worth approximately $12 billion at the time of writing. Other assets in its portfolio include 50.224k ETH, valued at $134.56 million, 750,722 WBTC, worth $44.80 million, and others.

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