The US government recently moved approximately 40,000 Bitcoins (BTC), valued at more than $2 billion, to Coinbase. The move has sparked speculation that the government may want to liquidate its assets while the cryptocurrency market is at local highs. Here are the details…
$2 billion worth of Bitcoin transferred to Coinbase
Last week, the world’s largest cryptocurrency Bitcoin (BTC) was under selling pressure. As of now, Bitcoin is down 1.59 percent to a price of $22.118 and a market cap of $424 billion. On-chain data provider Glassnode recently reported that around 40,000 Bitcoins are currently in motion from linked wallets seized by US Government law enforcement. While the majority appear to be internal transfers, some have also moved to crypto exchange Coinbase.
Approximately 40k $BTC from wallets associated with US Government law enforcement seizures are on the move.
Of these, the majority appear to be internal transfers (so far), however approximately 9,861 $BTC seized from the Silk Road hacker have been sent to our Coinbase cluster. pic.twitter.com/afuEYcV18L
— glassnode (@glassnode) March 7, 2023
Internal transfers are routine transactions that involve the redistribution of assets within the organization, not the sale. When it comes to US government Bitcoin holdings, transfers are likely to be part of the government’s regular management of crypto assets. It is worth noting that approximately 9,861 BTC seized from the Silk Road hacker were also sent to Coinbase. Silk Road, as we have reported as Kriptokoin.com, was a dark web marketplace that was shut down by the FBI in 2013. The seized Bitcoins were sold at auction in 2014 and it is not clear why they are now transferred to Coinbase.
How has the price of Bitcoin been affected?
The move raised questions about the US government’s overall strategy regarding cryptocurrency assets. While some thought the government might consider selling its holdings while the market was high, others argued that the transfers were part of the government’s ongoing management of assets. Despite Fed Chairman Jerome Powell’s most recent bearish speech to the US Congress, government transfers, and other developments in the space, the price of Bitcoin has remained relatively stable. But for some, selling pressure is coming.
“Bitcoin has dropped below a critical support area of $23,050 to $23,730, where 1.63 million addresses have purchased more than $910,000 in BTC,” said popular crypto analyst Ali Martinez, for example, based on data from IntoTheBlock. Failure to reclaim this area as support could trigger a sell-off that pushes BTC towards $20,700 or even $19,300. On the other hand, the total number of BTC addresses holding more than 1,000 coins also fell in the past week, as can be seen in the chart above.
How is the biggest cryptocurrency reacting to macro developments?
Macro factors also do not seem to support further rallies for now. As we have also reported as Kriptokoin.com, Fed Chairman Jerome Powell, who gave a statement in the US Congress on Tuesday, said that the central bank will continue to increase interest rates and commit to reducing inflation below 2 percent. On Tuesday, a judge in the US court questioned the SEC for its rejection of the spot Bitcoin ETF. As a result, the GBTC share price rose even higher.
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