Coinbase Deal Speculated to be Behind the U.S. Government’s $2bn BTC Transfer
The U.S. Marshals Service has partnered with Coinbase to manage the distribution of its Bitcoin holdings over five years.
- After transferring 29.8k BTC, the U.S. government still has 183k BTC.
- China was estimated to have 194,000 BTC in 2022.
- While countries are selling seized BTC, El Salvador is accumulating it daily.
The U.S. Marshals Service previously selected Coinbase to secure and manage the trading of its digital assets portfolio. According to Bloomberg analyst James Seyffart, this arrangement is believed to be connected to the U.S. government’s recent transfer of $2 billion worth of Bitcoin to two specific addresses.
The U.S. Marshals plan to distribute their Bitcoin holdings over five years in scheduled transactions. Arkham notes that they transferred 10,000 BTC, likely to an institutional custodian, and 19,800 BTC to another address.
Bitcoin’s price hit $70,000 after the Bitcoin 2024 conference, where Donald Trump vowed to hold government-seized BTC. It then dropped to $67,000 following news of the transfer to Coinbase Prime as part of its custody deal, highlighted by Coinmarketcap.
Government BTC Holdings
Despite transferring 29,800 BTC, the U.S. government remains the largest holder of Bitcoin. Additionally, it possesses millions in other assets, including over $100 million in ETH and USDT and over $10 million each in AUSDC, BUSD, and USDC stablecoins.
If the U.S. government decides to sell its BTC holdings, it will fall behind China as the second-largest holder, per data from Bitcoin Treasuries. In 2022, China was estimated to have 194,000 BTC, as reported by Benzinga, with no recent news of any sales.
The German government also recently sold its 50,000 BTC holdings from an online piracy case, netting $2.88 billion at an average price of $57,600. The sale, aimed at completing “as quickly as possible,” involved daily Bitcoin transfers since July 1.
While Germany and the U.S. see BTC as a seized asset, El Salvador views it as legal tender and accumulates it to boost reserves. Although only holding 5,826.76 BTC worth around $353 million, the country steadily purchases 1 BTC daily.
Exchanging Crypto for Fiat
The FBI confiscated over 144,000 BTC (worth $9.7 billion today) from Silk Road founder Ross Ulbricht in 2013, selling them via auction from 2014 to 2017. In 2020, the U.S. government seized an additional 69,370 BTC, which has since been accumulating without major sales.
The U.S. acquires Bitcoin primarily through seizures, typically sold by the U.S. Marshals Service via auctions. Proceeds are deposited into the Treasury’s Asset Forfeiture Fund or similar accounts.
Donald Trump and RFK Jr. propose that if elected, the government will hold its seized Bitcoin instead of selling it.
The U.S. Marshals Service emphasizes its role in managing and disposing of large quantities of crypto assets. Its contract with Coinbase is designed to streamline these assets’ custody, management, and disposal.
