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The US government has transferred 3,940 BTC to a Coinbase Prime Wallet, igniting panic that it could lead to more selling pressure affecting the price of Bitcoin.
According to Arkham Intelligence, the transferred coins were seized from Banmeet Singh, a convicted drug trafficker who pled guilty to money laundering earlier this year.
US Government Sends 3,940 BTC To Coinbase
Lookonchain says the transferred BTC is worth more than $241 million. The US government still holds 213,546, valued at over $13 billion, making it one of the largest Bitcoin holders.
Note that the US government wallets deposited 3,940 $BTC($241.22M) into #Coinbase Prime 5 minutes ago.
— Lookonchain (@lookonchain) June 26, 2024
The US government currently holds 213,546 $BTC($13.07B). pic.twitter.com/CAc87E2xFa
The US government is among the largest BTC holders, followed closely by China and the UK. China has a Bitcoin stash of 190,000 BTC, while the UK holds 61,000 BTC. The US has already sold more than 195,000 coins.
The Bitcoin transferred by the US government is linked to Singh, a drug dealer who received payments in cryptocurrencies. Singh’s drug operations laundered around $150 million from drug proceeds using crypto accounts.
Reports indicate that Singh relinquished 4,000 crypto coins following his arrest. He was sentenced to five years in prison but was released after one week because of time already served.
Government Bitcoin Sales Increase Selling Pressure
Government Bitcoin sales have increased the selling pressure affecting Bitcoin this month. Besides governments, Bitcoin miners and whales have also been dumping coins into the market, increasing supply as the demand remains notably low.
In addition to the US, the German government has recently sold around $2.76 billion worth of Bitcoin. The most recent transaction occurred on June 26, when a German Bitcoin wallet sent $24M worth of BTC to Coinbase and Kraken. According to Arkham Intelligence, the German government holds over $2 billion of Bitcoin.
Eleven governments around the world currently hold Bitcoin. These wallet addresses account for 2.7% of the total Bitcoin supply.
Besides governments, there are concerns about the selling pressure created by Mt.Gox. As earlier reported, the crypto market was in a panic after news that the Mt.Gox Rehabilitation Trustee readied to dump 140,000 Bitcoin into the market.
The price of Bitcoin has dropped slightly by 1.5% in the last 24 hours, trading at $60,732 at 03:45 a.m. EST.
According to CryptoQuant’s Ki Young Li, the recent government sell-offs are less likely to affect Bitcoin’s price. He noted that sell-side liquidity on Coinbase Prime was higher during a bull market than during a bear market.
“US government sold 4K Bitcoin today, but less likely to impact the market. Coinbase Prime handled 20-49K BTC in sell-side liquidity daily during high spot ETF inflows and 6-15K daily during low spot ETF inflows. Posting this because I’m tired of government selling FUDs,” he said.