In a potentially highly political move, the US Democratic administration orchestrated the transfer of 29,800 Bitcoin, worth approximately $2 billion, to a newly created address on Monday. The development, first identified by crypto intelligence platform Arkham, not only stunned the market but also sparked significant speculation and debate within the industry.
Arkhams report detailed that this large sum of Bitcoin was split into two separate addresses: 10,000 BTC now held in bc1qlap8 and 19,800 BTC held in bc1qngy. Analysts at Arkham believe the 10,000 BTC represents a deposit into an institutional custody or service, suggesting possible preparation for a sale.
These transactions came shortly after former US President and current presidential candidate Donald Trump stated at the Bitcoin 2024 conference on Saturday that he plans to block the US government from selling its significant BTC holdings. Before yesterday’s move, the US government held over 213,000 BTC.
Trump vowed to block any sale of the government’s BTC holdings, seeing them as the cornerstone of a new “strategic national Bitcoin reserve.” At the same time, advisers to Vice President Kamala Harris, also a Democratic presidential candidate, endearing with leading crypto companies to “reset” relationships. This outreach was reportedly intended to bridge the gap between the Democratic Party and the Bitcoin and crypto sector, which recently emerged as a key supporter of Trump, Harris’ direct rival in the presidential race.
However, the recent activity regarding BTC sales tells a different story. This move signals a potential shift in strategy, which is in stark contrast to the outreach efforts. According to several Bitcoin and crypto industry experts, this development suggests a move to thwart Trump’s “stockpile” plans. Despite this sale, the The US government still owns 183,439 BTC, worth approximately $12.6 billion. These assets could be further liquidated before Trump’s potential inauguration in January 2025, if he wins the election.
Reactions from the Bitcoin Industry
David Bailey, CEO of Bitcoin Magazine and advisor to the Trump campaign, was among the first to criticize the move, explanatory: “I just landed in Miami and see the Harris administration preparing to dump 30,000 BTC just to spite DJT. That would be a huge political blunder for the Democrats. If they continue to plunder America’s bitcoin, they will permanently turn off a generation of voters.”
Eric Weiss, CEO of Bitcoin Investment Group, echoed this sentiment, emphasizing the political risk involved: “The Biden/Harris administration is giving a masterclass in how to lose 30 million votes.”
Galaxy Digital CEO Mike Novogratz criticized the timing and political sensitivity of the decision, especially after Trump’s public pledge to keep the government assets. “Someone deaf to the tone??? Moving Silk Road BTC two days after Trump promised not to move them is just plain stupid!!!!” he responded.
Tyler Winklevoss, co-founder of crypto exchange Gemini, pointed out the broader implications for the Biden-Harris administration’s relationship with the crypto industry. The ironic remark underscored the tensions between the crypto industry and US Democrats: “On Saturday, Donald Trump promised never to sell US government bitcoins. Two days later, the Biden-Harris administration moves $2 billion in Silk Road bitcoins. Great look and great way to reset our industry.”
Crypto analyst MacroScope (@MacroScope17) speculated about potential Trump retaliation, hinting at a political retaliation that could resonate with Bitcoin advocates and voters alike: “If the government sells BTC now after Trump’s promise, look for his harsh response by promising to order the Treasury Department to buy it again (RFK/Lummis-like proposal) to replenish US reserves.”
Peter Schiff, a well-known critic of Bitcoin, criticized Trump’s original plan, which he notes: “If Trump really intended to use seized Bitcoin to start a U.S. ‘strategic’ reserve, he would have kept his intention secret until he was actually in office. Now that the Biden administration knows about his plan, they will make sure to sell every Satoshi before Trump takes office.”
At the time of writing, BTC was trading at $66,656.
Main image from TheDailyGuardian, chart from TradingView.com