The United States government has transferred approximately $600 million worth of Bitcoin to Coinbase, but analysts believe this move is unlikely to result in significant selling pressure.
According to Arkham Intelligence, an on-chain analytics firm, the Bitcoin was sent to a Coinbase Prime deposit wallet.
Despite initial concerns, Ryan Lee, chief analyst at Bitget Research, suggests that the Bitcoin is not likely to be sold. Lee stated,
"This does not mean that 10,000 Bitcoin have already been sold. Last month, the U.S. Marshals Service, an agency under the U.S. Department of Justice (DOJ), announced a partnership with Coinbase Prime to "safeguard and trade" large digital assets."
Large Bitcoin holders, often referred to as whales, can significantly impact Bitcoin's price. Investors closely monitor their transactions to assess potential selling pressure. The recent agreement between Coinbase and the DOJ might indicate an intention to trade large-cap cryptocurrencies like Bitcoin. However, Lee pointed out that the government may have transferred the assets to Coinbase for safekeeping rather than active trading. He said
"After all, "Coinbase is the primary custodian for U.S. ETFs, and it is a possibility that the U.S. government entrusted the BTC to Coinbase for safekeeping."
Moreover, Lee noted that a sale of nearly $590 million worth of Bitcoin is unlikely, as it would severely impact the current market liquidity. He alsoadded,
"Based on the current price performance, while there is a possibility of it being sold in the market, it is not very likely,"
The 10,000 Bitcoin recently transferred by the U.S. government were originally seized during the 2022 Silk Road raid, where the DOJ announced the seizure of 50,000 BTC from the dark net marketplace. The Silk Road, which has been defunct for over a decade, was notorious for enabling the sale of illicit goods, including weapons, drugs, and stolen credit card information. Ross Ulbricht, the creator of Silk Road, was arrested in 2013 and is currently serving two life sentences without the possibility of parole.
Earlier this year, in April, the U.S. government made a significant on-chain movement, transferring $2 billion worth of Bitcoin seized from Silk Road, marking the first major movement of these funds since their seizure.
