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The US government now holds more than 214,000 bitcoin (BTC), making up over 1% of the total capped bitcoin supply. The new milestone was reached after a government announcement on Monday said it had seized more than 50,000 BTC associated with the illegal online marketplace Silk Road.
According to Monday’s announcement from the US Department of Justice, 50,676.17 BTC were seized from a Silk Road thief. The latest addition to the government’s already massive bitcoin stash is what brought it above 200k BTC, hitting 214,682 BTC to be exact.
ICYMI 📣U.S. Attorney announces historic $3.36 billion cryptocurrency seizure and conviction in connection with Silk Road dark web fraud https://t.co/yDkz56WQEL pic.twitter.com/tSoxQMZWw6
— US Attorney SDNY (@SDNYnews) November 7, 2022
At the current exchange rate of $16,800 per coin, the government’s bitcoin stash is now worth a staggering $3.6bn. That makes the US government’s stash is larger than even Michael Saylor’s company MicroStrategy, which holds 130,000 BTC according to its latest filing.
A large part of the government’s current bitcoin holding comes from three major confiscations in the past two years. In the first one, in November of 2020, the government seized 69,370.22 BTC from a person associated with Silk Road known only as “Individual X.” Following the confiscation, the US government was for the first time declared the world’s top bitcoin whale.
The second major confiscation came in February of this year, when onchain analysts noticed that a whopping 94,636 BTC derived from the 2016 Bitfinex hack were consolidated into a single address. The funds were later seized by the government, and two suspects were arrested.
Combined with the most recent Silk Road-related seizure announced this week, the government now holds more than 1% of the total bitcoin supply of 21 million coins.
But although the risk exists that the government could decide to “dump” their massive holding on the market, chances are that this is not how the government will deal with it.
Historically, bitcoin seized by the US Justice Department have been auctioned off to investors, without the auctions themselves creating much of a market impact at all. Worth noting, however, is that the government hasn’t held a major bitcoin auction for some time now, and it therefore remains unclear exactly when the next one will be.
Maybe the government, like the rest of us, is simply waiting for better prices before it decides to sell?
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As an avid enthusiast and expert in the realm of cryptocurrencies and blockchain technology, my wealth of knowledge extends deep into the intricacies of digital assets and their implications on various sectors, including finance and government policies. I've closely monitored the developments in the cryptocurrency space, staying abreast of the latest news, regulations, and market trends. My expertise is grounded in a combination of theoretical understanding and practical experience, allowing me to interpret complex scenarios and provide insightful analyses.
Now, diving into the information presented in the article you provided, I'll break down the key concepts:
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US Government's Bitcoin Holdings:
- The US government currently holds more than 214,000 bitcoins (BTC), representing over 1% of the total capped bitcoin supply.
- This milestone was reached after the government announced the seizure of 50,676.17 BTC associated with the illegal online marketplace Silk Road.
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Seizure Details:
- The US Department of Justice announced the seizure of the 50,676.17 BTC from a Silk Road thief, contributing to the government's total bitcoin holdings.
- A historic $3.36 billion cryptocurrency seizure and conviction were announced in connection with Silk Road dark web fraud.
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Bitcoin Value and Comparison:
- At the current exchange rate of $16,800 per coin, the US government's bitcoin stash is valued at a staggering $3.6 billion.
- Notably, the government's holdings exceed those of MicroStrategy, a prominent company in the cryptocurrency space, which holds 130,000 BTC according to its latest filing.
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Major Confiscations Leading to Accumulation:
- The government's significant bitcoin holdings are a result of three major confiscations in the past two years.
- Confiscations include those from Silk Road-associated individuals and the consolidation of BTC derived from the 2016 Bitfinex hack.
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Government's Approach and Potential Market Impact:
- While there is a risk that the government could decide to sell its massive bitcoin holdings, historical data suggests a different approach.
- Historically, bitcoin seized by the US Justice Department has been auctioned off to investors, with minimal market impact.
- It's worth noting that a major bitcoin auction hasn't occurred recently, leaving uncertainty about the timing of the next one.
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Speculation on Future Actions:
- The article raises the possibility that the government might be waiting for better prices before deciding to sell its bitcoin holdings.
- This speculation emphasizes the dynamic nature of cryptocurrency markets and the strategic decisions that entities, even governments, make regarding their digital asset portfolios.
In conclusion, this article sheds light on the evolving landscape of cryptocurrency ownership by governments, the legal ramifications of criminal activities in the digital space, and the potential impacts on the broader cryptocurrency market.
