It is still unclear exactly what the government plans to do with the BTC, but some people in the crypto space are speculating that Trump may be fulfilling his Bitcoin reserve promise. Meanwhile, Bitcoin ETFs saw $6.4 billion in November inflows, driven by BlackRock’s iShares Bitcoin Trust. Marathon Digital invested $600 million in Bitcoin between Oct. 1 and Nov. 30, while MicroStrategy further solidified its position as the largest corporate Bitcoin holder with a 15,400 BTC purchase last week.
Silk Road Bitcoin Moved to Coinbase Prime Wallet
The United States government moved approximately $1.9 billion worth of Bitcoin (BTC) that was seized from the Silk Road marketplace to a Coinbase Prime wallet, according to blockchain records and data from Arkham Intelligence. On Dec. 2, a wallet linked to the U.S. government transferred around 19,800 Bitcoin, valued at close to $1.9 billion at the time, to a Coinbase Prime deposit address. This Bitcoin was originally seized during a 2021 investigation into James Zhong, who was later convicted of wire fraud connected to the Silk Road.
US Government transferring Bitcoin to Coinbase wallet (Source: Arkham Intelligence)
The Department of Justice announced in 2022 that more than 50,000 Bitcoin were confiscated from Zhong, including some that was stored on a single-board computer hidden under blankets in a popcorn tin. While the authorities have moved many of these coins across wallets, the U.S. government still holds about $18 billion worth of Bitcoin.
It remains unclear whether this recent transfer is part of a broader strategy to sell or trade the funds. Discussions among lawmakers, including Senator Cynthia Lummis and President-elect Donald Trump, have raised the idea of establishing a ”strategic Bitcoin reserve” for the United States.
The U.S. Marshals Service, which oversees the seizure of cryptocurrencies and other criminal assets, announced a partnership with Coinbase Prime in July for the custody of such tokens. This happened despite Coinbase facing a civil suit filed by the Securities and Exchange Commission (SEC) in June of 2023.
The Silk Road marketplace was once a hub for illicit transactions involving weapons, drugs, and stolen credit card information, and was dismantled after the arrest of its founder Ross Ulbricht. He was sentenced to life in prison without parole in 2015, and has since received a lot of support from the crypto community for a commutation of his sentence. President-elect Donald Trump also pledged to commute Ulbricht’s sentence on the first day of his second term.
Bitcoin ETFs See $6.4 Billion Inflows in November
In November, United States investors channeled close to $6.4 billion into spot Bitcoin exchange-traded funds (ETFs). During this month, Bitcoin’s market price also surged by 45% to reach new highs. The month-long rally saw Bitcoin prices climb from $68,000 to $99,000, thanks to very strong bullish sentiment. Spot BTC ETFs collectively attracted $6.87 billion in investments, offset by outflows that totaled $411 million.
Bitcoin ETF flow (Source: Farside Investors)
BlackRock’s iShares Bitcoin Trust ETF dominated the inflows by securing $5.6 billion and accounting for almost 87% of the monthly total. Other major contributors included Fidelity’s Wise Origin Bitcoin Fund with $962 million, Grayscale’s Bitcoin Mini Trust ETF with $211.5 million, and the VanEck Bitcoin ETF with $71.2 million. These figures proved just how much investor confidence in Bitcoin’s price trajectory is growing.
Outflows were primarily driven by the Grayscale Bitcoin Trust ETF, which saw $364 million withdrawn, followed by the Bitwise Bitcoin ETF with $40.4 million and the Valkyrie Bitcoin Fund with $6.8 million. Despite these outflows, the market maintained its strong optimism.
Crypto fear and greed index (Source: Alternative)
The Crypto Fear & Greed Index also hit a yearly high of 92 on Nov. 22. While the index dipped slightly in December, it still reflects overwhelmingly positive investor confidence.
Marathon Digital Invests $600M in Bitcoin
ETF investors were not the only ones who stocked up on Bitcoin recently. Marathon Digital invested more than $600 million in Bitcoin over the past two months, according to a filing with the United States SEC on Dec. 2.
The company revealed the acquisition of 6,484 Bitcoin between Oct. 1 and Nov. 30 at an average price of $95,352 per BTC. This amounted to a total cost of $618.3 million. Marathon also announced plans to issue $700 million in convertible senior notes due in 2031 through a private offering. The proceeds will be used for additional Bitcoin purchases and repurchasing existing convertible notes due in 2026.
Some public companies that own BTC (Source: BiTBO)
As the largest publicly traded crypto mining company by market cap, Marathon Digital is the second-largest corporate Bitcoin holder after MicroStrategy, according to BitcoinTreasuries. On Nov. 26, the company called for the United States to accelerate its Bitcoin accumulation strategy as it believes in the importance of securing Bitcoin reserves for economic and national security. Marathon compared the importance of holding Bitcoin to maintaining gold reserves, and argued that these assets provide stability in the event of declining confidence in the dollar.
Despite advocating for Bitcoin accumulation, Marathon sold 63% of its mined Bitcoin in May of 2024, very shortly after Bitcoin’s fourth halving reduced the mining block reward from 6.25 BTC to 3.125 BTC. The sale involved 390 Bitcoin out of the 616 BTC that were mined that month.
While President-elect Donald Trump promised to add Bitcoin to the U.S. Treasury reserve, some experts, like Galaxy Digital CEO Mike Novogratz, are skeptical about the likelihood of a Bitcoin strategic reserve being established during his term.
MicroStrategy Bought 15,400 BTC in a Week
MicroStrategy also boosted its position as a leading corporate Bitcoin holder by buying 15,400 BTC between Nov. 25 and Dec. 1, funded through $1.5 billion raised from a stock sale under its at-the-market equity program. The purchase was completed at an average price of $95,976 per Bitcoin, according to a Dec. 2 filing with the United States SEC. During the same period, MicroStrategy sold 3.7 million shares of its Class A common stock, which generated $1.48 billion in net proceeds to fund the acquisition.
As of Dec. 1, MicroStrategy and its subsidiaries hold a total of 402,100 BTC, which is valued at close to $38.4 billion at current market prices. The firm spent $23.4 billion on Bitcoin purchases at an average price of $58,263 per coin, which is a 64% gain on its investments.
This latest acquisition happened after an even larger purchase the week prior, when the company bought 55,000 BTC for $5.4 billion at an average price of $97,862. That transaction was funded through a combination of a private offering of 0% convertible senior notes due in 2029 and proceeds from the equity program.
In addition to expanding MicroStrategy’s Bitcoin holdings, executive chairman Michael Saylor urged Microsoft to also adopt a similar Bitcoin-centric strategy. Saylor pitched the idea to Microsoft’s board, and claimed the tech giant could increase its market cap by almost $5 trillion by aggressively adopting Bitcoin. He suggested Microsoft convert its dividend payouts, stock buybacks, cash flows, and debt into Bitcoin, which he argued could add hundreds of dollars to the company’s stock price and create trillions of dollars in enterprise value.
This article was originally Posted on Coinpaper.com
