Bitcoin market shaken as US government sells 9.8k BTC?
George Washington wears sunglasses with a Bitcoin sign. Cryptocurrency, digital money concept.
The cryptocurrency market has experienced a significant drop as the United States government reportedly sold 9,800 Bitcoin (BTC) worth $277 million, according to certain reports. The US government seized the Bitcoin in question during the Silkroad case, which reported by Whale Wire on Twitter.
Bitcoin investors brace for impact
The US government’s alleged sale of such a large amount of Bitcoin caused a ripple effect in the market, with prices falling within minutes. This is not the first time there have been reports of the US government selling BTC, but it may be one of the biggest sales.
Bitcoin’s recent roller-coaster ride has investors hanging on. After reaching the $28,000 level following the Federal Reserve (Fed) CPI report, the news that the US government sold a whopping $277 million worth of Bitcoin sent the market plunging.
Other parties, including independent analysts and research firms CryptoQuant and Arkham, have disputed the transaction. Large Bitcoin transactions linked to the US government caused controversy in the past. Like today’s price action, the news triggered fear and uncertainty among investors.
In that sense, the news should be taken with a grain of salt. According to a pseudonymous analyst:
38 minutes ago, big 9,800 $BTC The transaction, valued at $264 million, was rumored to have been sent from a US government-controlled wallet.
As a result, BTC’s price fell by 5.3%.
However, after investigating the origin of the funds and receiving confirmation from Arkham, there is no… pic.twitter.com/uT9uVHpGQ2
— An Apes Prologue (@apes_prologue) 10 May 2023
This led to a 0.7% retracement and a drop to $26,800. But, like a phoenix rising from the ashes, Bitcoin bounced back and climbed above the 50-day moving average support at $27,200.
Despite this, according to Whale Wire, even if the US government sold, it still owns over 200,000 BTC; prices could drop below $10,000 immediately if they were to sell that amount. This has raised questions about the government’s intentions regarding their BTC holdings and whether they will continue to sell them in large quantities.
The US government also reportedly sold 9,800 Bitcoin on March 14, seized from criminals involved in illegal activities on the Silk Road website. At the time of the auction, the price of Bitcoin was approximately $26,000 and valued at approximately $215 million.
According to a court filing, the US government plans to sell another 31,700 BTC in connection with Silk Road. This online marketplace facilitated illegal activities and was seized by law enforcement agencies in 2013. However, it remains to be seen whether these events will delay the Bitcoin bull run and further lower BTC’s price to new lower lows.
Featured image from Unsplash, chart from TradingView.com
