One of the biggest threats to the Crypto ecosystem is the behavior of some whales that may abuse of their position of dominance over the market by manipulating prices with their movements. This problem, which should tend to disappear as social adoption becomes more widespread, is a major headache for analysts, and for those who are looking into fundamentals to find the value of assets which the price should tend to sooner or later.
We are in a decentralized economy, but unfortunately, we are still in the early stages and that implies instability and volatility where the big players have (too) much influence.
A clear example is the market crash caused by the lack of liquidity of FTX, to which Binance had to come to the rescue (friendly, according to good old Sam).
But that has been ahead of all the analysis carried out by professionals in recent weeks.
This is a hard lesson. We dream of a decentralized system but to achieve it we must first go through a long desert crossing where the great main actors are playing the music we have to dance.
For this reason, I find a piece of news that has gone very unnoticed in the midst of so much farce to be very remarkable: The US government now has at least 210,000 Bitcoin (BTC).
US Government is the biggest whale.
According to crypto influencer Satochi Stacker and Binance, after the latest seizure of 50,000 BTC the US government holds 210,000 BTC which is equivalent to $4.3 billion!!!
James Zhong was recently found guilty of creating a scheme to defraud the Silk Road dark web market in September 2012. Zhong illegally accumulated 50,676 BTC. The BTCs were found in a raid on his house, it is believed in exchange for something, a pact with the Department of Justice (pay or jail).
In November 2020, the US Department of Justice announced the seizure of around 70,000 BTC from a person named “Individual X”, another Silk Road hacker.
In addition, US authorities revealed that they had seized around $3.6 billion in bitcoin from Ilya Lichtenstein and his wife, Heather Morgan, who were responsible for the Bitfinex hack in 2016. They attempted to launder $4.5B in cryptocurrency stolen from the hack. from Bitfinex.
The US holds far more BTC than Microestrategy or any other known big whale.
What is this whale going to do with his BTC?
The US government follows an auction criteria for any crypto assets seized from criminal activities. In November of last year, authorities sold $56 million in cryptocurrency seized from the BitConnect fraud scheme. Auction proceeds are used to compensate crime victims or distributed among government agencies.
And it’s not the only one. China has about 194K Bitcoin confiscated in the PlusToken scam in 2019 and Bulgaria has more than 200,000 BTC, from raids also from the time of the Silk Road, although it has never confirmed it, nor has it denied it.
So as analysts and observers of this exciting new world that we are seeing grow under our noses, we should keep an eye on the behavior of these whales that are still reluctant to create regulation in this regard. Depending on the strategy they follow, their behavior could significantly affect the market.
If these 4 numbers are true, that would mean that only between these three governments they already have at least 3% of the market, $12 billion. Without considering other governments.
But don’t worry for now, they have been accumulating cryptos for many years, judging by their historical behavior, these whales are Hodlers 😉
Yours in crypto