Bitcoin Addresses related to the U.S. Government

The Bitcoin Rich List has a special Whale, "The U.S. Government."

It is known to currently possess three large Bitcoin addresses, ranking 5th, 8th, and 13th on the BitInfoCharts Top 100 Richest Bitcoin Addresses list. These addresses collectively hold approximately 205,539 BTC.

The Bitcoin held in these addresses is all seized from illegal activities, involving three cases: the Bitfinex Hacker Case, the Silk Road Case, and the James Zhong Case.

On March 14th of this year, the U.S. government sold a portion of the Bitcoin from one of these addresses, valued at nearly $300 million. This sale caused approximately a -6% fluctuation in the entire Bitcoin market at that time. According to reports, the U.S. government plans to sell the remaining Bitcoin from this address later this year, which has garnered significant attention from investors.

Now, let's take a closer look at the current status of the U.S. government's Bitcoin addresses and make some predictions about the timing, amount, and potential impact of their next Bitcoin public sale.

Bitfinex Haker Case Address

The U.S. government address currently holding the most Bitcoin is bc1qazcm763858nkj2dj986etajv6wquslv8uxwczt. It ranks just behind Binance, Bitfinex, and Robinhood's Cold Wallet Addresses in terms of Bitcoin holdings.

The Bitcoin in this address was from the Bitfinex hacker. On August 2, 2016, Bitfinex fell victim to a hack in which approximately 120,000 BTC was stolen. Around 94,643 BTC has been recovered, and it was seized by the U.S. government and placed in this address on February 1, 2022.

Since Bitcoin was deposited into this address on February 1, 2022, there have been no further transaction activities.

Here are the key details of this address:

• Balance: 94,643 BTC
• Initial Active Time: 2022-02-01
• In & Out Transactions:

In: 2022-02-01, +94,643 BTC

Silk Road Case Address

The U.S. government address currently holding the second-largest amount of Bitcoin is bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6.

The Bitcoin in this address originates from the Silk Road, a Darknet marketplace. The U.S. government seized approximately 69,370 BTC from an unidentified hacker known as "Individual X." These assets were confirmed to be related to the Silk Road and were deposited into this address in a single transaction on November 4, 2020.

Since Bitcoin was deposited into this address on November 4, 2020, there have been no further transaction activities.

Here are the key details of this address:

• Balance: 69,370 BTC
• Initial Active Time: 2020-11-04
• In & Out Transactions:

In: 2020-11-04, +69,370 BTC

James Zhong Case Address

The last U.S. government address currently holding a significant amount of Bitcoin is bc1qmxjefnuy06v345v6vhwpwt05dztztmx4g3y7wp.

The Bitcoin in this address originates from the James Zhong Case, which is also related to the Silk Road Darknet. The U.S. government seized approximately 51,351 BTC from the Silk Road hacker James Zhong. Out of this amount, 49,825 BTC was sent to this address, while the remaining 1,526 BTC was sent to another Bitcoin address.

Unlike the previous two addresses, this address has seen several outgoing transactions since receiving Bitcoin. The current balance has been reduced to zero.

According to case documents filed by the U.S. Southern District of New York on March 31, 2023, on March 14, 2023, the U.S. government sold 9,861 BTC, yielding a net profit of approximately 215 million dollars. The remaining 41,490 BTC will be liquidated in four batches later this year.

The liquidation auctions will be conducted publicly by the U.S. Marshals Service. However, the specific timing and amounts of liquidation have not been disclosed yet.

Here are the key details of this address:

• Balance: 49,825 BTC（Previous）➡️ 0 BTC（Now）
• Initial Active Time: 2022-03-26
• In & Out Transactions:

In: 2022-03-26, +49,825 BTC

Out: 2023-03-08, -9,000 BTC; -40,000 BTC

Out: 2023-07-12, -319 BTC; -506 BTC

According to statistics from mempool.space, the two Bitcoin transactions that were sent on March 8th have been split and transferred to multiple addresses as follows:

• The 9,000 BTC was initially sent to one address. Later, this amount was combined with the 319 BTC on July 12th. These funds have been transferred multiple times between internal addresses controlled by the U.S. government.
• The 40,000 BTC was split into two portions:

- 9,825 BTC was sent to a Coinbase address. Later, it was liquidated along with 36 BTC in a public auction. (Total of 9,861 BTC)

- 30,175 BTC was sent to another address controlled by the U.S. government, awaiting future liquidations.

Some Predictions

Sales Timing and Amount Predictions

Based on court documents, the U.S. government has plans for four more sales of Bitcoin related to the James Zhong Case this year. According to on-chain data, as of mid-September, the four James Zhong addresses holding Bitcoin have not shown any transaction activity. Therefore, two possible scenarios can be considered:

• Original Sale Plan

If the U.S. government sticks to its original sale plan, it will need to complete four sales in the remaining four months of this year, with an average of approximately 10,000 BTC per sale. Given the previous sale date (March 14, 2023), it's likely that these four sales will also be scheduled around the middle of each month, roughly on September 15th, October 15th, November 15th, and December 15th.

• Delayed Sale Plan

If the U.S. government does not conduct the first round of Bitcoin sales related to the James Zhong Case in September, they may opt to delay the sale plan for the purpose of maintaining market stability. This could result in postponing the complete liquidation of the remaining Bitcoin until next year.

Market Prediction

On March 8, 2023, the U.S. government conducted two significant Bitcoin transfers, totaling 49,000 BTC moved to new addresses, including 9,825 BTC sold to Coinbase. This raised concerns among investors about Bitcoin selling pressure, leading to a 6% price drop in Bitcoin from March 8th to March 10th (followed by a recovery starting on March 11th). Additionally, the entire cryptocurrency market experienced some level of volatility, with major cryptocurrencies seeing varying degrees of decline (from 2% to 6%).

Based on this historical data, we can speculate that the potential Bitcoin price fluctuation resulting from each subsequent sale, given that the sale amounts are not significantly different from March 8th, may range from approximately -2% to -6%.

Future Sales Prediction

According to the U.S. government's plan, all remaining Bitcoin in the James Zhong Case addresses is expected to be sold this year. The Bitcoin that sold next is highly likely to come from another address related to the Silk Road case. There are two specific reasons for this:

• The Bitcoin in this address is also associated with the Silk Road case. This case dates back nearly 13 years, and the details of the case are clear. The primary offender, Ross William Ulbricht, has agreed to have all Bitcoin in this address auctioned by the U.S. Government.
• The Silk Road Case address is currently the second-largest address in terms of Bitcoin holdings owned by the U.S. government. After the complete liquidation of Bitcoin in the James Zhong Case, if there is a demand for liquidating a large amount of Bitcoin, it is undoubtedly the best choice.

Summary

• There are three U.S. government Bitcoin addresses that traders should pay attention to: bc1qazcm763858nkj2dj986etajv6wquslv8uxwczt, bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6, and bc1qmxjefnuy06v345v6vhwpwt05dztztmx4g3y7wp.
• This year, it's crucial to monitor the James Zhong Case address: bc1qmxjefnuy06v345v6vhwpwt05dztztmx4g3y7wp.
• The U.S. government plans to conduct four batches of liquidation auctions for the remaining Bitcoin in the James Zhong Case address, totaling approximately 41,490.72 BTC.
• The estimated sale dates for the remaining Bitcoin are Sept. 15, Oct. 15, Nov. 15, and Dec. 15, with an average of 10,000 BTC per sale.
• The potential Bitcoin price fluctuation caused by each sale is estimated to be around -2% to -6%.
• The next address likely to undergo liquidation is the Silk Road Case address: bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6.