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$1 billion worth of Silk Road Bitcoins on the move; BTC dump imminent?

$1 billion worth of Silk Road Bitcoins on the move; BTC dump imminent

The US government has moved $1 billion worth of Bitcoin (BTC) it seized from the anonymous darknet marketplace Silk Road in 2021 and 2022.

A total of 49,000 BTC moved from government wallet addresses, of which roughly 10,000 BTC went to top global exchange Coinbase, blockchain security firm PeckShield announced in a tweet on 8th March that the BTC is part of those seized in 2021 and 2022.

Between November 2021 and March 2022, the US government seized about 51,351.9 BTC from the Silk Road crime proceeds. According to PeckShield, the BTC were held in two government addresses: bc1q5s…0ch and bc1q2ra…cx7 until now. At the time, the BTC was worth roughly $3.39 billion.

Another recognised crypto market intelligence platform, Glassnode has also noticed an unusual BTC movement. Most transfers were internal, including close to 10,000 BTC sent to Coinbase. Glassnode reports that 40,000 BTC were moved in total by government regulators.

Source: Glassnode

Silk Road money laundering

Silk Road was a black market platform notorious for its money laundering activities. Founded in 2011 by Ross Ulbricht, US regulators shut it down in 2013 on suspicion of illegal activities. Following a series of investigations and house searches, the BTC was confiscated and traced to Ulbricht who’s currently serving a life sentence for the crime. 

Silk Road was one of the pioneer websites to accept BTC and since it came to be known as a money laundering platform, Bitcoin and crypto have had a complicated reputation with the government ever since.

The implication of the BTC movements

At times of massive BTC movements like this, one fear is that there may be a massive dump in the price of the asset if the Bitcoin goes to an exchange. 

Although there was a slight dip in BTC price from $22,469 to $22,000 following the event, only about 10,000 BTC (~$217 million) went to Coinbase and were probably sold. This shouldn’t be of much concern since not all 49,000 BTC were sold.

Bitcoin price currently sits at $22,059 but could see a bigger hit if the remaining 39,000 BTC move to Coinbase or any other exchange as this could trigger a panic sell. 

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