The cryptocurrency market has experienced a significant dip as the United States government allegedly sold 9,800 Bitcoin (BTC) worth $277 million, per certain reports. The US government seized the Bitcoin in question during the Silkroad case, as 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 dropping in minutes. This is not the first time there have been reports that the US government has sold BTC, but it could be one of the largest sales.
Bitcoin’s recent rollercoaster ride has had investors holding on tight. After reaching the $28,000 level post-CPI report by the Federal Reserve (Fed), the news of the US government selling a whopping $277 million worth of Bitcoin caused a dip in the market.
Other parties, including independent analysts and research firms CryptoQuant and Arkham, have contested the transaction. Large Bitcoin transactions associated with the U.S. government caused controversy in the past. Similar to 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 pseudonym analyst:
38 minutes ago, a large 9,800 $BTC transaction, valued at $264 million, was rumored to be sent from a US Government-controlled wallet.
As a result, BTC’s price fell by 5.3%.
However, after examining the origin of the funds and receiving confirmation from Arkham, there is no… pic.twitter.com/uT9uVHpGQ2
— An Ape’s Prologue (@apes_prologue) May 10, 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 under $10,000 instantly 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 selling them in large quantities.
The US government also allegedly sold 9,800 Bitcoin on March 14th, 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 if these events will delay the Bitcoin bull run and further drop BTC’s price to new lower lows.
Featured image from Unsplash, chart from TradingView.com