US Government Just Sent $240M in Bitcoin to Coinbase – Another Selloff?

The U.S. government appears to be selling more Bitcoin, with a known federal wallet address sending another 3,940 BTC ($240 million) to Coinbase on Wednesday.

The move to Coinbase Prime—the exchange’s institutional platform—was immediately picked up by blockchain sleuths, highlighting a blockchain transfer at 1pm ET for just $18 in fees.

Expert opinions were split regarding where the government obtained the transferred Bitcoin.

According to on-chain sleuth ZachXBT’s Telegram channel, the funds were part of the reclaimed Bitcoin from the “Silk Road hack.” After the infamous darknet marketplace shutdown in 2013, the Justice Department tracked down the hacker and seized 50,676 BTC, which the government has been selling off in batches ever since.

Aside from Silk Road, many of the government’s coins were reclaimed from 2016 Bitfinex hacker Razzlekhan in 2022. But Blockchain data platform Arkham Intelligence says the coins stolen today came from neither of those sources.

“This BTC was originally seized from narcotics trafficker Banmeet Singh, and forfeited at trial in January 2024,” the firm tweeted on Thursday.

Banmeet Singh was a drug kingpin who pled guilty earlier this year to operating an international narcotics ring from his home for several years. As part of the plea agreement, Singh agreed to turn over $150 million worth of his crypto—now worth more thanks to Bitcoin’s price appreciation since that time.

According to Arkham, the government still owns a whopping $13 billion in BTC, making it one of the single largest Bitcoin owners on Earth after MicroStrategy.

Much like the U.S. government, Germany sold $170 million from its hefty $2.8 billion Bitcoin stash last week. Arkham’s data shows that it moved tens of millions more to exchanges Kraken and Coinbase on Tuesday.

Government sales have added to a wave of sell pressure hitting Bitcoin this month from Bitcoin miners and whales, while on-chain analysis suggests that new demand for Bitcoin has been drying up. Bitcoin is trading for $60,775, as of writing, down 13% on the month.