Bitcoin price crash

YEREVAN ( — The U.S. government, which seized nearly $2 billion in Bitcoin from the defunct black-market website Silk Road, conducted several transactions on Tuesday through one of its accounts. This activity, observed by various blockchain analytics firms, suggests the government is preparing to eventually sell off these assets.

Silk Road's Seized Bitcoin: The Shift to Government Hands
Silk Road’s Seized Bitcoin: The Shift to Government Hands. Source: Bloomberg Business

U.S. Government Tests Coinbase Transfer with $131 Million Move

Arkham Intelligence Inc. reports that a digital wallet, presumably linked to the U.S. government, transferred approximately $65 in a test transaction to a deposit address belonging to Coinbase Global Inc.’s Coinbase Prime unit. On April 2, the wallet completed transfers totaling about $131 million to Coinbase. Most of these funds were then moved to various addresses associated with the U.S. government.

Stock Market Intraday Performance Chart
Stock Market Intraday Performance Chart. Source: Coinbase Global Inc

Parker Merritt, a solutions engineer at Coin Metrics, suggests that the $65 transaction looks like a test run by the U.S. government.

“They sent a small amount to Coinbase Prime and then credited the bulk of the funds back to government-linked addresses as ‘change output,’” he explained, adding:

“It’s likely they’ll move a larger amount, maybe even the entire sum, to Coinbase Prime next, now that they’ve verified the test transaction reached its intended target.”

Flipside Crypto reports that several government-linked addresses pooled together and transferred around 2,000 Bitcoin to Coinbase. It’s important to note that digital wallets are typically anonymous.

Market watchers have been monitoring the Bitcoin addresses controlled by the U.S. government because any sales from these addresses could affect the price of the cryptocurrency. In the past, the government has sold portions of its Silk Road Bitcoin collection, sometimes through auctions. The account involved in Tuesday’s transactions originally held 30,174 Bitcoin.

The Transition of Silk Road’s Bitcoin Fortune

In 2013, the government closed Silk Road, a website where Bitcoin was used to purchase items ranging from heroin and LSD to fake passports. At that time, federal agents confiscated Bitcoin valued at $3.6 million, which has since skyrocketed to billions of dollars in value, partly fueled by recent surges in the cryptocurrency market. So far this year, Bitcoin’s price has soared by over 50%.

From 2011 to 2013, Ross William Ulbricht ran Silk Road. This website facilitated $1.2 billion in illegal sales and earned $80 million in commissions, all through Bitcoin, as court documents from that period show. In 2015, a federal jury in New York found Ulbricht guilty on seven criminal charges, including distributing narcotics and money laundering. Ulbricht, known by the alias “Dread Pirate Roberts,” is currently serving a life sentence.

The post Bitcoin Alert! A Big $2B BTC Selloff is Around The Corner appeared first on CoinChapter.