Bitcoin (BTC) prices took a tumble on August 15th, coinciding with the US government’s largest sale of confiscated cryptocurrency this year. The news sent shockwaves through the market, pushing Bitcoin down to multi-day lows of $57,816, according to data from Cointelegraph Markets Pro and TradingView.
The sale, which amounted to 10,000 BTC (roughly $581 million) and was transferred to cryptocurrency exchange Coinbase, seemed to dampen any positive sentiment surrounding recent US economic data. A lower-than-expected Consumer Price Index (CPI) print, typically seen as bullish for Bitcoin, failed to lift the price.
This isn’t the first time government crypto sales have triggered market jitters. Lookonchain, a crypto analytics platform, highlighted similar reactions throughout 2024. In a recent post, they pointed out, “The US Government transferred 15,940 BTC ($966.4M) to Coinbase Prime in three transactions this year.”
However, some analysts believe the market overreacts to government activity. Axel Adler, from on-chain analytics platform CryptoQuant, suggests large investors might be “selling the news,” exacerbating the decline. “Every time Arkham tweets about coin movements, bears instantly start dumping the market,” he stated. “10K BTC from a US Government doesn’t affect anything, but the mere fact causes such a reaction.”
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This “sell-off narrative” extends beyond the US. Germany recently sold its entire cache of confiscated Bitcoin, with their tagged wallet now containing a mere $400 worth of BTC. This decision, made between June and July, has already cost them dearly. Germany’s initial holdings were valued at around $3.5 billion, and according to popular social media commentator Quinten, they missed out on potential profits exceeding $124 million within a week of the final sale.
The debate continues on whether these government actions represent a fundamental shift in the cryptocurrency market. While short-term volatility is undeniable, some analysts believe long-term holders (“HODLers”) will ultimately benefit by weathering the storm.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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