Disturbing Bitcoin news came this morning that the US government is about to dump a large amount of BTC. But how big could the impact of this sale be and should Bitcoin investors be worried?
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Thousands of Bitcoins for sale
Crypto Insiders reported that the US government is planning to sell 2,934 BTC. The Bitcoins came from the hands of Xanaxman, who sold drugs on the infamous Silk Road platform Darkweb.
Xanaxman, consisting of Ryan Farace and Sean Bridges, sold Xanax over the Internet. They made a lot of money with this. However, Farace initially stated that he could no longer access his BTC.
He was later caught when he and his father tried to launder the Bitcoins so the American government wouldn't run away with them. They were convicted of money laundering and the American government managed to confiscate the BTC.
But now the US government wants to sell the cryptocurrency. This caused panic among some investors. Because 2,934 BTC worth around 110.5 million euros sounds like a lot of money.
Bitcoin sales are “peanuts”
But will the sale really have an impact? The well-known Bitcoin maximalist Steven Lubka winds there There's nothing to say there: “Peanuts, we ate four times as much for breakfast due to GBTC depletion.”
Lubka refers to Grayscale’s Bitcoin exchange fund. The American regulator has approved 11 funds, including GBTC. But this fund has seen a huge outflow since its approval.
Due to this outflow, Grayscale has to jettison large amounts of Bitcoins, and these amounts are therefore many times higher than the amount of BTC that the US government wants to jettison. And so far the BTC price is holding up quite well.
So should Bitcoin investors be worried about this particular Bitcoin sale of nearly 3,000 BTC? No, these sales pale into insignificance when compared to the bigger picture.
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