On-chain Insights #3: Bitcoin Holdings of the U.S. Government
Link to Bitcoin Key Metrics Dashboard: US Government Bitcoin Holdings
Link to all of our On-Chain Dashboards: https://dune.com/21shares_research
Bitcoin seized: The U.S. government has seized at least 215k BTC since 2020.
Recent transactions: The U.S. government sent ~9.9k BTC worth $221.7 million at the time of the transfer to Coinbase, raising speculation of a potential sale.
Current Bitcoin balance: The estimated Bitcoin balance of the U.S. government is 205,515 BTC, worth about $5.8 billion as of March 22, 2023.
Top Bitcoin holders: the U.S. government controls about 1.06% of Bitcoin’s circulating supply as of March 22, 2023. Out of the top 10 largest Bitcoin wallets, it owns two of them.
We recently released our Bitcoin Key Metrics dashboard, where you can find the top 100 wallets holding Bitcoin. We discovered that among these large holders is the U.S. Government, which has seized at least 215k BTC since 2020. On March 9, 2023, ~49k BTC associated with U.S. government law enforcement seizures were on the move, with ~9.9k worth $221.7 million sent to a Coinbase address. As such, this dashboard tracks in real-time the U.S. government wallets associated with the three largest BTC seizures to date to anticipate market movements:
November 2020: 69,369 BTC linked to an anonymous criminal known as “Individual X,” who hacked the funds from the dark web internet marketplace Silk Road during 2013-14.
January 2022: 94,643 BTC associated with Ilya Lichtenstein and his wife, Heather Morgan. The Internal Revenue Service (IRS) accused the couple of laundering $4.5 billion stolen during the 2016 Bitfinex hack.
March 2022: 51,326 BTC belonging to James Zhong, who pleaded guilty to committing wire fraud for stealing the funds from Silk Road in September 2012.
We should note that this is a lower-bound estimation of the U.S. government holdings based on publicly available information. If you are aware of any other seizures that have been disclosed, please get in touch with us so we can track the assets in this dashboard.
Our dashboard makes it easy to stay on top of the latest trends and developments — and possibly ahead of the curve.
U.S. government transaction history.
U.S. government cumulative balance denominated in BTC and USD.
Total BTC seized by entity.
1. The ~49k BTC on the move on March 9, 2023, originated from the seizure of James Zhong’s funds, who stole the Bitcoin from Silk Road in September 2012.
~39.1k BTC, worth $875.3 million at the time, appear to be internal transfers. However, ~9.9k BTC, worth $221.7 million at the time, was sent to a Coinbase address, raising speculation that the move could signal a potential sale. It wouldn’t be the first time the U.S. government conducts a sale of seized Bitcoin. After law enforcement shut down Silk Road in 2013, it seized 173,991 BTC while pursuing the case, including 144,336 from a wallet belonging to Ross Ulbricht, the marketplace creator. The U.S. government sold all those coins in four auctions in 2014 and 2015, with venture capitalist Tim Draper famously buying 30,000 BTC for $18.7 million.
Figure 1: U.S. government transaction history
2. The current estimated Bitcoin balance of the U.S. government is 205,515 BTC, worth about $5.8 billion as of March 22, 2023.
We estimate that the U.S. government owns about 1.06% of Bitcoin’s circulating supply as of March 22, 2023. The Bitcoin holdings of the U.S. Government were worth a little over $10 billion at its peak, precisely a year ago.
Figure 2: U.S. government cumulative balance (BTC and USD Value)
3. By cross-referencing our findings with our previous dashboard on Bitcoin’s key metrics, we notice that the U.S. government owns two of the top 10 largest Bitcoin wallets.
The first wallet is associated with the 94,643 BTC seized from Ilya Lichtenstein and his wife, Heather Morgan. The Internal Revenue Service (IRS) accused the couple of laundering $4.5 billion stolen during the 2016 Bitfinex hack. The second wallet is associated with the 69,369 BTC seized from an anonymous criminal known as “Individual X,” who hacked the funds from the dark web internet marketplace Silk Road during 2013-14.
Figure 3: Top 10 Bitcoin holders
An early misconception about crypto that has been demystified over the years is that it can be used to obfuscate transactions easily and, thus, that it’s regularly used for criminal purposes. According to Chainalysis, the overall illicit activity constituted a small share of crypto’s total volume in 2022 at 0.24%. While it’s true that there are a handful of protocols focused on privacy-enhancing features, Bitcoin, Ethereum, and the majority of cryptoassets today rely on a public blockchain that allows every transaction to be traced. The U.S. government seizures associated with stolen Bitcoin from Silk Road and the 2016 Bitfinex hack are proof of that. In addition, our dashboard allows us to track the U.S. government wallets in real time, leveraging that transparency to anticipate market movements.
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