How many bitcoins does the US government still hold? When will they be shipped?

Recently we published a dashboard of key Bitcoin indicators, which includes the top 100 wallets holding Bitcoin. We found that among these largest Bitcoin holders is the US government. Since 2020, the US government has seized at least 215,000 Bitcoins.

On March 9, 2023, approximately 49,000 bitcoins seized by U.S. government law enforcement moved on-chain, of which approximately 9,900 bitcoins worth a total of $221.7 million were sent to Coinbase addresses. Therefore, we track the three largest bitcoin wallets seized by the U.S. government so far in real time based on the Bitcoin Key Indicators Dashboard, and predict market trends through wallet fund changes:

1. November 2020: 69, 369 Bitcoins are linked to an anonymous criminal known as "Individual X" who stole Bitcoins from the dark web market Silk Road in 2013-14.

2. January 2022: 94,643 Bitcoins are linked to Ilya Lichtenstein and his wife Heather Morgan. The IRS accuses the couple of laundering $4.5 billion in the 2016 Bitfinex hack.

3. March 2022: 51, 326 Bitcoins were seized 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 U.S. government’s Bitcoin holdings based on publicly available information.

Large Bitcoin transactions on the U.S. government chain in recent years

1. The approximately 49,000 bitcoins moved on the U.S. government chain on March 9, 2023 came from the bitcoins stolen by James Zhong from the dark web "Silk Road" in September 2012.

The funds, amounting to approximately 3.91 million bitcoins, valued at $875.3 million at the time, appeared to be an internal transfer. However, 99,000 bitcoins, valued at $221.7 million at the time, were sent to a Coinbase address, sparking speculation that the move could indicate the sale of the seized bitcoins.

This is not the first time the U.S. government has sold seized Bitcoin. In 2013, law enforcement shut down the dark web Silk Road and seized 173,991 Bitcoins during the investigation, of which 144,336 came from the wallet of Ross Ulbricht, the creator of the dark web Silk Road market. The U.S. government auctioned these Bitcoins in four batches in 2014 and 2015, and venture capitalist Tim Draper bought 30,000 of them for $18.7 million.

Figure 1: U.S. Government Transaction History

2. It is estimated that as of March 22, 2023, the U.S. government’s current Bitcoin balance is 205,515, worth approximately $5.8 billion.

We estimate that the U.S. government owns around 1.06% of the circulating supply of Bitcoin as of March 22, 2023. Just one year ago, the U.S. government’s Bitcoin holdings were worth just over $10 billion at their peak.

Figure 2: U.S. government cumulative balance (in Bitcoin and USD)

3. By cross-referencing our findings with our previous dashboard on key Bitcoin metrics, we noticed that the US government owns two of the top ten Bitcoin wallets.

The first wallet is associated with 94,643 bitcoins seized from Ilya Lichtenstein and his wife Heather Morgan, who the Internal Revenue Service (IRS) has accused of laundering $4.5 billion in the 2016 Bitfinex hack. The second wallet is associated with 69,369 bitcoins seized from an anonymous criminal known as “Individual X,” who stole the funds from the dark web internet marketplace Silk Road between 2013 and 2014.

Figure 3: Top 10 Bitcoin holders

Summarize

• Amount of Bitcoin Seized: Since 2020, the U.S. government has seized at least 215,000 Bitcoins.

• Recent transactions: The U.S. government transferred 99,000 bitcoins worth $221.7 million to Coinbase, sparking speculation about a potential sale.

• Current Bitcoin Balance: As of March 22, 2023, the U.S. government's Bitcoin balance is estimated to be 205, 515, worth approximately $5.8 billion.

• The largest Bitcoin holders: As of March 22, 2023, the U.S. government controls 1.06% of the circulating supply of Bitcoin. The U.S. government accounts for two of the top ten Bitcoin wallets.

For many years, people have mistakenly believed that cryptocurrencies can facilitate "secret transactions." As a result, cryptocurrencies are often used for criminal purposes. According to Chainalysis data, in 2022, overall illegal activities accounted for a small proportion of the total cryptocurrency volume, only 0.24%.