The US government has transferred a substantial amount of Bitcoin, originally owned by a convicted drug trafficker, to a Coinbase Prime address. The transfer, valued at approximately $240 million, has contributed to a decline in the Bitcoin price, dropping towards $60,000. The sudden movement of this significant amount of Bitcoin, which is part of the government’s impressive 213,546 Bitcoin reserves, has led to increased uncertainty and panic in the crypto market.
Similar reactions have been seen in the past whenever the US government has transferred or sold their Bitcoin holdings. In early April, the government moved $2 billion worth of Bitcoin, and in March 2023, they sold 9,861 coins for $216 million.
The sudden drop in Bitcoin price has also impacted other cryptocurrencies, such as Ethereum and Solana, which have experienced pressure and drops in value. Ethereum fell by almost 1 percent, while Solana decreased by more than 1.5 percent. Dogecoin suffered even more, losing over 3 percent.
Earlier this year, a panic sale led to speculation about the government’s future plans for their Bitcoin reserves. In April, the government transferred 30,174 Bitcoin, valued at $1.99 billion, which was previously owned by James Zhong, who stole the coins from the darknet marketplace Silk Road in 2012.
The government’s large stake in Bitcoin has significant implications, making them one of the largest holders in the world. As they continue to accumulate and sell their Bitcoin holdings, the market reacts accordingly, leading to increased uncertainty and pressure on the crypto market.