Bitcoin
Bitcoin Drops to $66K as US Moves $2B in Seized BTC to Unidentified Wallets
Bitcoin suffered a sharp decline to around $66,300 on July 29 after the US government transferred $2 billion worth of seized bitcoin (BTC) linked to the Silk Road marketplace.
Arkham Intelligence revealed that a US government-owned wallet transferred 29,800 BTC to a address not identified no previous transaction history as of July 29th.
The address subsequently sent 19,800 BTC and 10,000 BTC to two different addresses. The unexpected move triggered concerns among investors about a potential liquidation.
Arkham analysts speculated that the transfer of 10,000 BTC, valued at approximately $670 million, was likely a deposit to an institutional custodian or service provider.
Historically, such significant moves often precede asset sell-offs, causing market jitters. This time was no different, as Bitcoin’s value fell nearly 5% from its session high of $70,000 to hit a low of $66,360 — a 1.6% decline in the past 24 hours.
The flagship cryptocurrency has since recovered some of its losses and is trading at $67,350 at press time, based on data from CryptoSlate.
Two days after Trump’s speech
The timing of this transfer is particularly notable as it comes just two days after the former president Donald Trump — the Republican candidate for the 2024 presidential election — announced his plan to establish a “Strategic National Stockpile of Bitcoin” if elected.
At the Bitcoin 2024 conference in Nashville, Trump promised that the government would “keep 100%” of the 210,000 Bitcoins it already owns, increasing market sensitivity to government actions.
The speech and Senator Cynthia Lummis’ subsequent announcement of legislation that aims to do the same sparked a rally over the weekend that culminated in Bitcoin hitting $70,000 before crashing.
The U.S. Department of Justice has not yet responded to requests for comment on whether the transferred Bitcoin is intended for sale. However, the U.S. Marshals Service (USMS) recently awarded Coinbase Prime a contract to manage and dispose of its large-cap cryptocurrency, suggesting the transfer may not signal an imminent sale.
Community reaction
The crypto community reacted quickly, with most criticizing the timing of the move.
Digital Galaxy CEO Mike Novogratz he said:
“Is anyone deaf??? Moving Silk Road BTC two days after Trump promised not to move them is just plain idiotic!!!!”
Similarly, Digibuild CEO Robert Salvador said the Biden-Harris regime is “dumping Bitcoin” two days after Trump’s speech to “hurt the price and investors.”
Adding to the speculation, Satoshi Action Fund co-founder Dennis Porter he said:
“I can’t officially confirm this, but I heard there is now an internal government dispute over who in government will get Bitcoin. Days after hearing this, $2,000,000,000 worth of BTC was transferred to a new wallet.”
On the other hand, venture capitalist Adam Cochran called for calm, noting that such transfers between wallets and custodians are routine and do not necessarily indicate a sale. He said:
“You guys freak out every time big coins move.”
This incident mirrors past market reactions to major government Bitcoin moves. Last month, news of the German government moving Bitcoin to cryptocurrency exchanges caused a temporary price drop. The country downloaded the entirety of its nearly 50,000 BTC stash in the span of a few weeks.
Silk Road, an online black market primarily used for illegal drug transactions, was shut down by authorities in 2014, and the associated Bitcoin has been seized by US authorities periodically since then.
Bitcoin Market Data
At press time, 20:17 UTC on July 29, 2024, Bitcoin is ranked #1 in market capitalization and the price is drop of 1.24% in the last 24 hours. Bitcoin has a market cap of 1.33 trillion dollars with a 24-hour trading volume of $38.75 billion. Learn more about Bitcoin ›
Cryptocurrency Market Summary
At press time, 20:17 UTC on July 29, 2024, the total cryptocurrency market is valued at US$2.41 trillion with a 24-hour volume of US$ 79.35 billion. Bitcoin dominance is currently at 55.17%. Learn more about the cryptocurrency market ›