U.S. Government Moves $593M Silk Road BTC, Sale Incoming?

The United States government has continued its sales of bitcoins (BTC) linked to the darknet marketplace Silk Road. This time, authorities transferred around 10,000 BTC worth approximately $593.91 million.

Data from the on-chain intelligence platform Arkham revealed that a wallet address that received 10,000 BTC from a known U.S. government wallet two weeks ago sent the funds to another wallet on the crypto exchange Coinbase Prime. This is a clear sign of impending sale.

U.S. Gov to Sell Silk Road BTC

Since the beginning of the year, the U.S. government has been selling tranches of bitcoins from its stash acquired through seizures and asset forfeitures. Arkham intelligence shows that the wallet housing the seized assets holds up to $12.52 billion in several cryptocurrencies, including ether (ETH), Tether (USDT), Wrapped bitcoin (WBTC), USD Coin (USDC), Binance Coin (BNB), and Binance USD (BUSD).

Authorities seized the Silk Road stash of over 69,000 BTC in 2021 and have since offloaded more than 20,000 BTC. The wallet currently holds 203,239 BTC, including seizures from other entities, worth $12.13 billion. 

The government’s last sale of bitcoins linked to Silk Road occurred in late June: 3,940 BTC worth $240 million seized from a Silk Road vendor and narcotics dealer were sent to a Coinbase Prime address. The sale before that occurred in April.

How Did BTC React?

As seen with most heavy BTC transfers, the leading cryptocurrency fell 4% in a sharp move from $61,500 to $59,108, per data from CoinMarketCap. Although the asset had recovered slightly at the time of writing to $59,240, it was still down 3.3% in the past 24 hours.

While bitcoin’s reaction has been minimal at best, subsequent coin movements within a few days could trigger a significant correction. Bitcoin faces the risk of plunging as low as it did when the German government went on a selling spree to offload its BTC stash.

Between June 19 and July 12, German authorities sold almost 50,000 BTC confiscated from the now-defunct film piracy website Movie2K, netting $2.88 billion in proceeds. Within that time, BTC tumbled from the $70,000 range to as low as $55,000 and struggled to recover until the sales were over.