US Government Transfers $600 Million in Bitcoin to Coinbase, Will Not Sell It

The U.S. government has transferred nearly $600 million worth of Bitcoin to Coinbase. On August 15, 10,000 BTC, valued at over $593 million, were moved to a Coinbase Prime deposit wallet.

Secure Custody Rather Than Sale

Analysts suggest that the transfer is more likely for secure custody rather than an imminent sale. Ryan Lee, Chief Analyst at Bitget Research, points out that this move may be part of a partnership between the US Marshals Service and Coinbase Prime to safeguard large digital assets.

The Bitcoin in question was seized during the 2022 Silk Road raid, which resulted in the confiscation of 50,000 BTC from the dark web marketplace. The assets have remained dormant since their seizure, attracting attention due to their potential impact on the market.

Presidential Candidate Views

Donald Trump, a presidential candidate, has pledged not to sell government-held Bitcoin if elected. This promise reflects his campaign’s strategy to appeal to cryptocurrency supporters.

Impact on Bitcoin Mining Industry

The U.S. Bitcoin mining industry faces challenges post-Bitcoin halving, which reduced rewards and tightened profit margins. Publicly listed mining companies have raised over $2.2 billion in 2024 through debt financing to maintain operations.

Mining firms, including Bitdeer and Marathon Digital, have turned to debt financing to address financial pressures. Notable deals include Core Scientific’s $400 million private offering and Marathon’s $250 million offering.

Debt financing activities of public miners (Source:Miner Weekly)

Mining Industry Concerns

With a potential Harris administration, there is concern among Bitcoin miners about future regulatory stances. Some in the industry worry about a possibly hostile approach towards digital assets, while others are diversifying revenue streams, such as Core Scientific’s agreement with CoreWaeve.