Recently emerging blockchain data shows that the US government is preparing to dispose of a significant amount of Bitcoin in its possession. This move may create selling pressure on the cryptocurrency market, causing prices to drop. Government sales of Bitcoin are causing concern among investors. In this article, we will examine how the government sell-off may affect the market, the uncertainty behind the recent transfer to Coinbase, and its possible effects on Bitcoin’s price and overall market psychology.
Activity in the US government’s cryptocurrency wallet
Blockchain data suggests that the US government is preparing to divest more of its significant Bitcoin (BTC) holdings and could add selling pressure to the cryptocurrency market. Government-controlled Bitcoin, associated with the Silk Road black market market, recently initiated a small transaction on Coinbase, a cryptocurrency exchange known to have been used by the government in previous coin sales, on-chain analyst ZachXBT found.
After this transaction, the government’s purse took action. Because during the transfer, he transferred 1999 BTC worth 139 million dollars to Coinbase Prime. Currently, the government’s primary address for Silk Road Bitcoin holdings is heavily loaded. Because it contains 29,799 BTC, which is equivalent to approximately 1.96 billion dollars. The move comes after the government seized more than 50,000 BTC linked to Silk Road from the marketplace hacker James Zhong in late 2021. Since then, the government has been slowly selling these coins. Additionally, the latest sale consists of 9000 BTC in July 2023.
How are government sales affecting the market?
In the long run, the government’s disposal of such a significant amount of Bitcoin affects the market. A decrease in market supply theoretically leads to an increase in price, assuming demand remains the same. However, in a down market like the current one, large government sales have the potential to cause panic in the market. It also has the potential to drive prices down by causing investors to sell their assets. Ultimately, however, it remains unclear what the latest transfer to Coinbase represents.
Analysts like ZachXBT suggest this could be a sign of a sell-off. However, it is also possible that the government moved the coins to another wallet or cold storage. The US government’s divestment of Bitcoin holdings is something to watch closely for the crypto market. The government’s intentions and the nature of the actions will become clearer in the coming days.
The impact of this situation on Bitcoin’s price and the market in general will be better understood in the coming weeks. Meanwhile cryptokoin.com According to data, it decreased by 0.3 percent in the last 24 hours. Currently, the largest cryptocurrency by market cap is trading at $66,233. The coin has experienced a 5.2 percent decline in the last 7 days and has fallen above $ 70,000.
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