Bitcoin Drops to $65K: What’s Next for the Crypto Queen?
Bitcoin is experiencing another significant drop in its price and is once again touching 65,000 dollars. This decline comes after a massive transfer of 2 billion dollars in BTC carried out by the US government to unknown recipients.
The massive bitcoin transfer by the US government
On July 29, 2024, the US government transferred nearly 28,000 BTC, worth approximately 2 billion dollars, to unidentified recipients. This transaction was detected by Arkham Intelligence, which linked the transferred BTC to funds seized by the US Department of Justice in 2020. These funds came from the defunct dark web marketplace, Silk Road.
Shortly after the initial transfer, the US government redistributed the bitcoins by sending about 19,800 BTC to one address and 10,000 BTC to another. Arkham Intelligence interprets this action as an institutional deposit, indicating strategic management of the seized assets.
The market repercussions were not long in coming. Right after the announcement of this transfer, the price of bitcoin fell, dropping below 66,000 dollars. Currently, the crypto asset is trading just above this threshold.
Reactions and speculations around the US government move
The crypto community is abuzz, speculating about the motivations behind this massive transfer. David Bailey, CEO of Bitcoin Magazine, suggested that this move could be politically motivated to counter the policies of former President Donald Trump.
According to Bailey, this action could be seen as an attempt to hinder Trump’s pro-crypto policies, especially his promise not to sell the government’s bitcoin holdings. Other crypto figures, like Mike Novogratz, criticized the timing of the transfer, calling it “ill-advised”.
They believe this action could be linked to an agreement with Coinbase for the custody of government assets. This speculation is reinforced by the fact that the government had previously transferred nearly 2,000 BTC to a Coinbase Prime hot wallet in April.
The implications of these actions are vast. Economically, such massive transactions can influence investor confidence and affect market prices. Politically, they raise questions about the use of digital assets as economic and political instruments, reflecting broader ideological battles within the American political sector.
