The cryptocurrency market experienced a sudden drop yesterday, with Bitcoin plummeting over 5% to trade around $66,000. This decline coincided with another event as a U.S. government-linked wallet transferred 30,175 bitcoins, reportedly seized from the Silk Road dark web marketplace.
What has sparked debate and speculation is the timing of this transfer and its effect on the price of Bitcoin.
U.S. Government’s $2B Bitcoin Transfer
A few hours back, a wallet associated with the U.S. government transferred a staggering 30,175 bitcoins to an unidentified destination, raising eyebrows across the crypto community. Bitcoin’s current price level amounts to approximately $2 billion worth of the digital asset. The transfer comes amidst ongoing market turbulence, with Bitcoin struggling to maintain its position above $70,000.
This isn’t the first instance of the U.S. government dealing with seized Bitcoin. Previously, in March 2023, the government sold 9,861 coins from its stash following a seizure related to the Silk Road website. This recent transfer, however, marks a significant escalation in the government’s involvement with cryptocurrency assets.
Benjamin Skew, an on-chain data expert, weighed in on the situation, shedding light on the nature of the transfer.
According to Skew, a closer examination reveals a clearer picture than a potential sell-off, which was assumed initially. Most funds were transferred to a newly created wallet, with only a fraction directed towards a wallet purportedly belonging to Coinbase.
Market Reaction
Following the transfer news, Bitcoin witnessed further downward movement, falling below the $65,000 mark. Although the cryptocurrency has since rebounded slightly to trade at $65,200, it remains down 4.7% over the past 24 hours.
The timing of the government’s Bitcoin transfer coinciding with the fall of Bitcoin has made the crypto community question its correlation. As Bitcoin is already grappling with a price correction (normal before a halving event), the transfer of such a substantial amount of seized has made analysts and investors closely monitor the market.
