In a move that could significantly impact political and market dynamics, the U.S. The Democratic administration transferred 29,800 Bitcoin, worth about $2 billion, to a newly created address on Monday. This transfer, first reported by the crypto intelligence platform Arkham, surprised the market and ignited considerable speculation and debate within the industry.
Arkham’s analysis revealed that the Bitcoin was split between two addresses: 10,000 BTC in bc1qlap8 and 19,800 BTC in bc1qngy. Analysts at Arkham suggest that the 10,000 BTC might be intended for institutional custody or a potential sale.
This action followed former President and current presidential candidate Donald Trump’s declaration at the Bitcoin 2024 conference on Saturday that he would prevent the U.S. government from selling its substantial Bitcoin holdings. Prior to this transaction, the U.S. government owned over 213,000 BTC.
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Trump had promised to block any sales of these BTC holdings, envisioning them as the foundation for a new “strategic national Bitcoin stockpile.” Meanwhile, Vice President Kamala Harris’s advisors have been reaching out to leading crypto companies to “reset” relationships, attempting to mend ties between the Democratic Party and the Bitcoin sector, which has recently been a strong supporter of Trump, Harris’s rival in the presidential race.
The recent Bitcoin sale appears to contradict these outreach efforts, suggesting a potential shift in strategy aimed at undermining Trump’s plans for a Bitcoin stockpile. Despite this sale, the U.S. government still holds 183,439 BTC, valued at around $12.6 billion, which 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, criticized the move, saying: “Just arrived in Miami and see the Harris administration preparing to offload 30,000 BTC just to spite DJT. This would be a major political misstep for the Democrats. If they continue to deplete America’s Bitcoin reserves, they will alienate a generation of voters.”
Eric Weiss, CEO of the Bitcoin Investment Group, shared this concern, pointing out the political risks: “The Biden/Harris administration is giving a master class on how to lose 30 million votes.”
Mike Novogratz, CEO of Galaxy Digital, criticized the timing and political sensitivity of the decision, especially in light of Trump’s pledge to preserve the government’s Bitcoin holdings. “Tone deaf anyone??? Moving Silk Road BTC two days after Trump’s pledge not to move them is just foolish!” he remarked.
Tyler Winklevoss, co-founder of the crypto exchange Gemini, highlighted the broader implications for the Biden-Harris administration’s relationship with the crypto industry. Winklevoss sarcastically noted the tensions: “On Saturday, Donald Trump pledged to never sell any of the U.S. government’s Bitcoin. Two days later, the Biden-Harris Administration moves $2 billion worth of Silk Road Bitcoin. Great look and a fantastic way to reset relations with our industry.”
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Crypto analyst MacroScope (@MacroScope17) speculated that Trump might retaliate politically, suggesting that he could propose instructing the Treasury to repurchase the Bitcoin if the government continues to sell: “If the government sells BTC after Trump’s pledge, expect him to counter by promising to re-buy it (RFK/Lummis-type proposal) to replenish U.S. reserves.”
Peter Schiff, a known Bitcoin critic, questioned Trump’s original plan, stating: “If Trump genuinely intended to use seized Bitcoin to create a U.S. ‘strategic’ reserve, he should have kept this plan secret until he was in office. Now that the Biden administration is aware of his intentions, they will likely sell every Satoshi before Trump takes office.”
As of press time, Bitcoin is trading at $66,656.
David Ma was born in 1980 in California, is a Vietnamese American, known as one of the entrepreneurs and investors in the field of cryptocurrency and stock market. In 2006, he graduated from Stanford University with honors and began his career in business.
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