On-chain analysis: How much Bitcoin does the U.S. government still hold?
The U.S. government controls 1.06% of the circulating supply of Bitcoin.Source: 21shares, “On-chain Insights #3: Bitcoin Holdings of the US Government”
Editor: Katie Gu (Odaily Planet Daily)
Recently, we released a Bitcoin key metrics dashboard, which involves the top 100 wallets holding Bitcoin. We found that the US government is among these largest Bitcoin holders. Since 2020, the US government has seized at least 215,000 Bitcoins.
On March 9, 2023, approximately 49,000 Bitcoins seized by US law enforcement moved on-chain, with about 9,900 Bitcoins worth $221.7 million sent to a Coinbase address. Therefore, we are tracking the three major Bitcoin wallets seized by the US government in real-time based on the Bitcoin key metrics dashboard, predicting market trends through wallet fund movements:
November 2020: 69,369 Bitcoins related to an anonymous criminal known as "Individual X," who stole Bitcoins from the dark web market "Silk Road" during 2013-14.
January 2022: 94,643 Bitcoins associated with Ilya Lichtenstein and his wife Heather Morgan. The IRS accused the couple of laundering $4.5 billion in the 2016 Bitfinex hack.
March 2022: Seized 51,326 Bitcoins from James Zhong, who was convicted of wire fraud for stealing Bitcoins from the dark web "Silk Road" in September 2012.
Please note that this is a bottom-line estimate of the US government's Bitcoin holdings based on public information.
I. Recent Large On-chain Bitcoin Transactions by the US Government
- The approximately 49,000 Bitcoins moved on-chain by the US government on March 9, 2023, came from the Bitcoins stolen by James Zhong from the dark web "Silk Road" in September 2012.
This fund of about 39,100 Bitcoins, valued at $875.3 million at the time, appears to be an internal transfer. However, the transfer of 9,900 Bitcoins worth $221.7 million to a Coinbase address raised speculation that the seized Bitcoins might be sold.
This is not the first time the US government has sold seized Bitcoins. In 2013, law enforcement shut down the dark web "Silk Road," seizing 173,991 Bitcoins during the investigation, of which 144,336 came from the wallet of Silk Road creator Ross Ulbricht. The US government auctioned these Bitcoins in four batches in 2014 and 2015, with venture capitalist Tim Draper purchasing 30,000 Bitcoins for $18.7 million.
Figure 1: US Government Transaction History
- As of March 22, 2023, the US government's current Bitcoin balance is estimated to be 205,515 Bitcoins, worth approximately $5.8 billion.
We estimate that as of March 22, 2023, the US government holds about 1.06% of the circulating supply of Bitcoin. Just a year ago, the value of the Bitcoins held by the US government peaked slightly above $10 billion.
Figure 2: US Government Cumulative Balance (in Bitcoin and USD)
- By cross-referencing our findings with our previous dashboard on Bitcoin key metrics, we noted that the US government holds two of the top ten Bitcoin wallets.
The first wallet is associated with the 94,643 Bitcoins seized from Ilya Lichtenstein and his wife Heather Morgan. The IRS accused the couple of laundering $4.5 billion in the 2016 Bitfinex hack. The second wallet is related to the 69,369 Bitcoins seized from an anonymous criminal known as "Individual X," who stole these funds from the dark web market "Silk Road" between 2013 and 2014.
Figure 3: Top 10 Bitcoin Holders
Summary
Amount of seized Bitcoins: Since 2020, the US government has seized at least 215,000 Bitcoins.
Recent transactions: The US government transferred approximately 9,900 Bitcoins worth $221.7 million to Coinbase, raising speculation about potential sales.
Current Bitcoin balance: As of March 22, 2023, the estimated Bitcoin balance of the US government is 205,515 Bitcoins, worth approximately $5.8 billion.
Largest Bitcoin holders: As of March 22, 2023, the US government controls about 1.06% of the circulating supply of Bitcoin. Among the top ten Bitcoin wallets, the US government holds two positions.
For years, it has been a misconception that cryptocurrencies facilitate "secret transactions." As a result, cryptocurrencies are often used for criminal purposes. According to Chainalysis data, in 2022, the overall illegal activity accounted for a very small proportion of the total cryptocurrency volume, only 0.24%.
