Are you worried about the US Government moving BTC?

[Vincom]

BTC has evolved beyond its initial status as a novel financial instrument. It's gaining mainstream acceptance and reportedly finding its way into national reserves. The US government alone holds a substantial amount of BTC (~ 207,189) seized from criminal activity, with a current value exceeding 14B USD^[1]. This surpasses holdings by major corporate investors like MicroStrategy (193K BTC) and positions the US as the world's largest holder of government-confiscated Bitcoin.  Given the significant size of this holding, the U.S. government's actions in the crypto market can be seen as having a whale-like impact, potentially causing significant price movements.

The US government sent shockwaves through the cryptocurrency world with a recent transfer of 15,085 BTC, valued at roughly 922M USD. This action coincided with Bitcoin reaching a new high of 60K USD, sparking speculation about a potential profit-taking strategy by the government^[2].

Concerns are mounting as this move echoes a similar transfer in July 2023. Back then, the government transferred 9,800 BTC (around 300M USD) which was followed by an 18% price drop for Bitcoin, falling from 30K USD to 25K USD^[3].

Despite the current price of Bitcoin reaching 68.5K USD and nearing its all-time high of 2021, the crypto community remains jittery.

Personally, I believe that the US government may consider selling confiscated BTC to generate revenue for the national budget. Unlike private investors focused on long-term holding strategies, the government's primary goal is to manage seized assets effectively. The current price of BTC could present a favorable opportunity to sell and increase government funds.

At the same time, I think: despite recent price gains and positive investor sentiment, a potential 1B USD liquidation by the US government is unlikely to significantly impact the rising momentum of BTC or the broader cryptocurrency market. Similar large sales, like FTX's 1B USD worth of GBTC sale in January^[4] and Genesis' current 1.3B USD worth of GBTC sale^[5], haven't had a major effect on BTC price. Considering the current market excitement and the high daily trading volume of BTC, exceeding 70B USD, a 1B USD sale from the US government wouldn't be a major cause for concern.

I would like to know your views on the possibility of selling 1B USD worth of BTC from the US government:

• Do you think the US government is about to sell 15,085 BTC?
• Will this event have a negative impact on BTC and the entire crypto market?
• Are you worried and changed your investment strategy because of this event?

References:
[1] Countries & Governments that Own Bitcoin
[2] US gov’t moved $922 million of seized Bitcoin after BTC price broke $60,000
[3] US Government Transfers $300 Million Worth of Seized Silk Road Bitcoins
[4] FTX Sold About $1B of Grayscale's Bitcoin ETF, Explaining Much of Outflow: Sources
[5] Genesis Cleared to Sell GBTC Shares Worth $1.3 Billion
Update 2024.04.03:
In a major cryptocurrency move, the U.S. government transferred 30,175 bitcoins (valued at around $2 billion) to a wallet associated with Coinbase.

• U.S. Government Moves $2 Billion in Bitcoin to Coinbase, Impacting Market

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[OcTradism]

The Bitcoin market now is bigger and can absorb sale from US government easily. I have no fear about it and we did knew that the US. Government have plan to do this many months ago. They announced they will do it so this news is only shocking for newbies, not for senior people in this market.

With Bitcoin Spot ETF massive demand on buying, they will buy all sales from US. government without thinking. They will buy almost all bitcoins from OTC market to US. government. They know about the Bitcoin controlled supply and don't want to miss this great opportunity.

Bitcoin Controlled supply.

[The Sceptical Chymist]

So I guess the question is whether I'm worried about the US government dumping its seized BTC on the market all at once, thereby causing said market to crash?

Nah.  By the way, what about all the other governments in the world?  Do they have control over bitcoin seized from criminals (or alleged ones) or gotten through some other means?  It's hard to imagine the US is unique in that they've caught people doing illegal stuff and took their bitcoin as their own.  Not sure if there's any data on that, because if there is I've never heard any mention of it.

Also, I thought at least some of that bitcoin (and perhaps various altcoins, too) was auctioned off from the Silk Road bust, though I'll admit I haven't been paying much attention to any of that.  But again, I'm not worried in the least.  If you really wanted to inject some fear into your paranoid heart, just imagine Satoshi coming back and dumping all the coins he mined onto the market all at once.  That might cause a wee bit of chaos....and then the market would recover as usual.  Fear not.

[mk4]

1. Maybe, maybe not. Doesn't matter to me.
2. If they sell, sure, simply because it's sell pressure.
3. No. If the price drops, then it's a better opportunity to buy bitcoin for cheaper.

Seriously, after being here for 7+ years, you wouldn't care much about the price. Even if bitcoin drops 20-40% it'll be nothing out of the ordinary.

[yhiaali3]

For me, I am not worried at all. The market has become so strong that it can absorb the large amounts of Bitcoin that the US government seized with ease. Of course there will be a slight impact, but that will not last for a long time and the wave will soon return to the rise again.

Such news would have caused concern in the recent past when the market was bearish and liquidity was low, but now with this strong momentum and significant rise, I do not expect it to have a significant impact.

Also, throwing these large quantities owned by the government into this bull market will be better for the market to get rid of the anxiety caused by these quantities because it will lead to a decrease in the quantities in the hands of the US government and it will not have a significant impact in the future or be used to put pressure on the Bitcoin market.

[pooya87]

This is an old question, nearly as old as Bitcoin itself.
The answer is always the same: nobody cares.

The reason why people don't and shouldn't care is pretty simple too.
First of all Bitcoin is not like those PoS shitcoins to give any kind of power to anyone holding any amount of bitcoin.
Secondly for the "investors", the US government isn't going to sign up on some centralized exchange and sell/dump these coins on the market to cause any drops in the market. These coins are always auctioned and sold off the market so it won't affect the price at all.

[adaseb]

From what I understand they sell those otc and they are auctioned off. At least that’s how it was in the past. I don’t think they will send it to coinbase and do a market sell on there.

What surprises me is that they haven’t sold anything since last July and price has been much higher. I wonder what they are waiting for. Now would be a perfect time because most of the sells would be absorbed by the etf inflows. If they sell during a bear market then it would be horrible for price but now since we got lots of demand the market should absorb it.

[Die_empty]

I would like to know your views on the possibility of selling 1B USD worth of BTC from the US government:

• Do you think the US government is about to sell 15,085 BTC?
• Will this event have a negative impact on BTC and the entire crypto market?
• Are you worried and changed your investment strategy because of this event?

i. I am not an insider in the US government, therefore don't know if they have any plan to auction any confiscated. There is usually an announcement from the government about their intention to sell these bitcoins. Interested parties would have to bid for the coin. I don't think there is any announcement about any future sales.
ii. These sales would always generate FUD because many media houses and crypto analysts would come up with different negative consequences. But the few auctions I have witnessed had little or no effect on the price. Even the slight effect disappeared within a few days.
iii. Like I stated above, this auction usually has minimal effect, hence there is no need to adjust my investment plan. Long-term holders don't pay much attention to FUD.       

[Lida93]

Similar large sales, like FTX's 1B USD worth of GBTC sale in January^[4] and Genesis' current 1.3B USD worth of GBTC sale^[5], haven't had a major effect on BTC price. Considering the current market excitement and the high daily trading volume of BTC, exceeding 70B USD, a 1B USD sale from the US government wouldn't be a major cause for concern.

I would like to know your views on the possibility of selling 1B USD worth of BTC from the US government:

For what it is I can say that from this part of your thread as I quoted  you have said it all. For bitcoin has saturated and penetrated the market today  beyond what it were decade ago and just the selling of 1B USD worth of bitcoin by any entity wouldn't sink bitcoin because someone else somewhere will be buying from the seller to hodl for another circle to make profit, so the price would rather keep rising with time after a little sell effect and then boom, we are back up again to another price rise.

Simply put, the seller is not selling in vacuum  which is why I or anyone should have no reason to fear. GBTC sales is a quick example. Bitcoin still doing great.

On the other hand, a sell of such amount of bitcoin by the US government is something I'll rather say we celebrate as it reduces the quantity of bitcoin in government possession to private individuals and entities thereby reduces the whale-effect manipulations of such government on bitcoin market price.

Just think about that!

[Magic-Money]

I'm not worried about the US Government selling off  Bitcoin and it only happens in a short period of time because of selling pressure and Bitcoin we still stabilize. Therefore thinking about Bitcoin is beyond measures and Bitcoin is still the best of digital assets that have a specific amount created and No additional Bitcoin will be created and that is the sweetest part of Bitcoin business.

[Despairo]

• Do you think the US government is about to sell 15,085 BTC?
• Will this event have a negative impact on BTC and the entire crypto market?
• Are you worried and changed your investment strategy because of this event?

1. Probably yes, probably no, they can do anything with their coins. Same like a centralized exchange can freeze someone else coins without any reason.

2. No, because it's not only a global institution that can buy and sell Bitcoin, if they sell their Bitcoin, the retails can buy it. So what's the problem?

3. No, it's really stupid to rely your investment because of someone else's decision, would you stop to invest in Bitcoin because your dad or your friend say Bitcoin is scam?

[hatshepsut93]

They don't have enough BTC to cause a major crash, they can only cause some short-term panic. When you're looking at price movements, you should also consider how long they last. Like, maybe the US dumping the coins that they have would drop the price by 10%, but in a week or two the price will return back to its course. Even if Microstrategy dumps, the price will eventually recover.

The only holder that you should be worried about is Satoshi, because a million of coins + the reputation loss of the creator abandoning their creation would be pretty bad and the effects would be felt for many-many years.

[kryptqnick]

I don't quite understand what the impact is supposed to be because the op mentioned how the US government transferred 15k BTC, which coincided with Bitcoin growing and reaching the price of $60k. Then there's a story about a price drop in July after a transfer of 9,800 BTC. To me, it kind of shows that there's no strong correlation, there's no significant impact. It went down after one transfer and up after another. So there's no reason to worry. The market is growing fast, and it can continue to grow or suddenly collapse regardless of the US government's actions.

[Greyhats]

I would like to know your views on the possibility of selling 1B USD worth of BTC from the US government:

• Do you think the US government is about to sell 15,085 BTC?
• Will this event have a negative impact on BTC and the entire crypto market?
• Are you worried and changed your investment strategy because of this event?

First off, great post and structure. Thanks for the taking the time to put this together.

1. I dont think it will go any where near spot markets, if they do sell it will be to OTC houses. I do also speculate they are weaponising the BTC transfer as some way of trying to tame the markets.
2. I think it will be a positive if they do sell in the long run, there is 15k of btc locked up in GOV coffers that would get redistributed out to the market. Thats a good thing!
3. No change

[Alpha Marine]

• Will this event have a negative impact on BTC and the entire crypto market?

On its own, I doubt that it would have any significant impact on BTC or the crypto market, but when it happens together with a series of other events then it can have an impact. For example, if the US government decides to sell its Bitcoin when other whales are selling the collectively, they can have a negative impact.
Also, I said it won't have a significant impact, not like it would have an impact at all. In the middle of last year, the price dipped a bit but it was only for a short term, that could be for a whole lot of reasons, it could also be because of FUD, but eventually, the market corrects itself.

• Are you worried and changed your investment strategy because of this event?

I wouldn't say "worried" but it's good to keep an eye out for the updates of such things.
These are events that can affect your investment so not paying attention to them is not a very wise thing to do. It doesn't necessarily mean you'll change your investment plans but it will help your investment decisions to be informed ones.

[thecodebear]

I honestly can't imagine why anyone would care that the US govt has bitcoin. I don't get the fear people have around any entity having a lot of Bitcoin. You're afraid they are going to sell? Guess what, that's perfectly acceptable lol. Anyone is allowed to buy or sell as much Bitcoin as they want. There is no problem there. I really don't understand this panic people have about large bitcoin holdings. Let people, companies, govts, whoever do whatever they are gonna do with their Bitcoin. It doesn't affect you. There is no reason you should at all care, let alone be worried.

[Rruchi man]

~

I try not to concern myself and worry about the things that I cannot control, and this example is one good example of the situations that I cannot control, hence so not worry myself. The US government can move BTC in any quantity that they like, it is no concern of mine.

Concerning yourself with things you cannot control os distracting, and can sway you from the focus of accumulating your own bitcoins.

[jossiel]

1. Why would I? That's nothing compared to the actual volume that we're having. But those with heart problems probably has to prepare themselves upon hearing the news that they have already sold that quantity of Bitcoins.

2. Probably but it's for the short term and just as how the quick crash has happened yesterday. You'll just see the quick recovery that became a normal thing for Bitcoin.

3. Nope. I'll keep holding no matter how bad the news are or whoever is going to dump their Bitcoins. Because there will always be someone who's bigger who would like to take those sold Bitcoins.

[bitzizzix]

I don't care and don't feel worried, that's their business and also their right because it's not my Bitcoin and it doesn't harm me either.
And the only thing I'm worried about is if Mr. Satoshi Nakamoto sells his holdings, because that will make the price of Bitcoin drop very significantly and apart from him I wouldn't worry and also don't care about it. 

[ImThour]

I do not care at all about what US Government does with the Bitcoin they have stolen from someone. The amount of volume which is being added to Bitcoin everyday is way beyond their control and I am sure, it will continue to uprise no matter what any country's government does. Also, can we some considering US to be the only nation in the world? Why not talk about the positive impact EL Salvador is making for the Bitcoin?