US Bitcoin holdings shifted ahead of Trump’s transition: A cause for concern?

• US government moved $1.92 billion in Bitcoin, fueling concerns about potential market impact.
• Bitcoin sale fears rise, but transfers may be for safekeeping, not imminent liquidation.

As Donald Trump’s administration prepares for its official transition on 20th January, 2025, the US government has taken significant steps involving its Bitcoin [BTC] holdings.

Recently, $1.92 billion worth of BTC, primarily seized from the Silk Road operation, was transferred into new wallets.

Of this, $963 million was immediately sent to Coinbase, a move that signals potential future sales.

This transfer is part of a broader trend where the U.S. government has shifted substantial Bitcoin assets—approximately $2.6 billion between July and August—further hinting at preparations for liquidation.

Is the Biden admin planning something big?

Amid growing concerns, community members speculate that President Joe Biden may be attempting to offload the U.S. government’s BTC reserves before Trump’s inauguration, potentially undermining plans to establish a Bitcoin Reserve.

On 2nd December 2024, data from Arkham, an on-chain intelligence platform, revealed that the U.S. government moved $1.92 billion worth of BTC into new wallets.

Source: Arkham/X

This transfer involved splitting the assets between two wallets, with one subsequently moving $963 million in Bitcoin to Coinbase, fueling further speculation about future sales and their potential impact on the market.

The Bitcoin assets in question were seized from the infamous Silk Road, and since they are legally owned by the U.S. government, there are growing concerns that they could be sold off in large volumes, leading to a potential market downturn.

Bitcoin’s recent and upcoming trends

Such a sale could exert significant downward pressure on BTC’s price, causing unease among investors.

This fear materialized swiftly, as Bitcoin’s price, which had been nearing the $100k threshold, dropped to $95,229.66, reflecting a 0.20% decline in the last 24 hours, according to CoinMarketCap.

Remarking on the situation, Carl B. Menger, an industry commentator said, 

“Is the government planning to sell Bitcoin before Trump takes office? Outgoing administrations should not undermine the incoming President, as the people have already voted them out.” 

However, despite concerns over the potential slowdown of the cryptocurrency market following Donald Trump’s inauguration the crypto community remains cautiously optimistic.

Challenges ahead

Historical data suggests that market rallies often lose steam after presidential transitions, but the crypto space has shown resilience in the past.

For instance, when the U.S. government prepared to sell $600 million in Bitcoin four months ago, the market initially faltered but quickly rebounded as institutional investment surged.

Moreover, while the recent transfers of Bitcoin by the Biden administration have sparked speculation, they may not indicate imminent sales.

The U.S. Marshals Service, which has a secure custody agreement with Coinbase Prime, suggests that the assets were moved for safekeeping rather than immediate liquidation, with regulatory procedures still to be followed before any sale can occur.