Surprise 4th Largest Bitcoin Holder Plans $130M Selloff

The estimated value of the sale has dipped over 10% since filing, from $133 million to $119 million.

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  • The fourth-largest holder of Bitcoin is preparing to offload millions of the asset.
  • Majority of the assets were confiscated from a dark web marketplace and money laundering bust.
  • The regulatory stance against crypto in the United States contradicts the government’s approach to the asset class. 

Since the approval of Bitcoin ETFs, the cryptocurrency market has been subject to heightened asset sell-offs triggered by the underperformance of the market giant following the landmark decision. The sell-off has negatively impacted market price and stability, slipping Bitcoin below $39,000 and recording a new-year low.

Pioneering the dump is Bitcoin ETF issuer Grayscale Investments, which had an unexpected floppy start to the trade of the newly launched investments and recorded over $2 billion in outflows in less than one week.  

Now joining the ranks, the reported fourth-largest holder of Bitcoin is planning a significant Bitcoin sell-off. And who is behind it? None other than the United States government.

US Government $130M Bitcoin Offload

According to a notice filed earlier this month, the U.S. government, the 4th largest holder of Bitcoin, is preparing to initiate the sell-off of 2,934 Bitcoins.

Filed on January 10, the government listed the proposed sale in two parts of approximately  2,875 BTC and 58 BTC, both seized from two now-convicted dark web marketplace drug traffickers, Ryan Farace and Sean Bridges.  

At the time of filing, the 2,934 sale was valued at over $133 million. However, its estimated value is approximately $119.3 million at press time. This sum only represents a fraction of the government’s total Bitcoin holdings, worth nearly $8 billion at the current market rate.

But how did the U.S. government acquire the funds in the first place? 

US Government, the 4th largest holder of Bitcoin? 

Despite its open regulatory campaign and constant opposition against the industry, the US government reportedly holds the title of the 4th largest holder of Bitcoin, boasting a portfolio of over 207,000 BTC. 

Most of the government’s stash consists of confiscated assets from convicted illicit actors, varying from darknet dealers to sanctioned cybercriminals. One notable seizure was the August 2023 Silk Road 69,370 Bitcoin confiscation, which included other Bitcoin assets, including Bitcoin Cash (BCH), Bitcoin gold (BTG), and Bitcoin SV (BSV).

The government’s paradoxical ‘seize and keep’ approach raises questions about the credibility of its skepticism and unfriendly actions against the industry, particularly considering its position as one of the largest whales of the asset class it so condemns.

US regulatory body SEC has often spearheaded campaigns against the industry, and influential political figures like Senator Warren have also labeled the asset class a “threat” to the United States.

On the Flipside 

  • The US government is surpassed by Satoshi Nakamoto, Grayscale Investments, and Binance, each holding between 500,000 and 1,000,000 Bitcoin. 
  • The government filed its sale notice on the same day as the approval of Bitcoin ETFs, suggesting a strategic move to coincide with the expected price surge.
  • While many investors have projected the sale to impact the market negatively, others affirm it is unlikely to faze it.

Why This matters

The U.S. government’s holding and selling of Bitcoin muddies its antagonistic stance against the cryptocurrency industry, underscoring an indecisive approach and lack of regulatory clarity around the asset class.

Find out more about the ongoing DOJ-Former Binance CEO tussle:
Judge Denies CZ’s UAE Travel Request Despite $4.5B Pledge 

Read more on Craig Wright’s unsuccessful offer to settle Satoshi lawsuits:
Satoshi Settlement Offer Met With Calls For “No Mercy”

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Grace Abidemi

Grace Abidemi, a cryptocurrency reporter at DailyCoin, covers industry developments and trends. She previously worked as a freelance writer. With a Bachelor's degree in German Language and certifications in marketing and storytelling, Grace creates engaging content. When not working, she's in Nigeria, mastering cooking and canvas painting, and enjoys learning about different cultures and languages.