US Government's Bitcoin Transfer to Coinbase Adds Pressure to Crypto Market
Pressure on the Crypto Market
The recent transfer of approximately 3,940 BTC, worth around $241 million, by the US government to Coinbase (NASDAQ: COIN) has introduced new pressures on the already volatile cryptocurrency market. This move, following the government's authority to liquidate seized Bitcoin, is part of a broader strategy to manage and reduce its crypto holdings.
Previous Government Actions and Market Impact
In April, the US government contributed to a market decline by transferring a significantly larger amount of Bitcoin, valued at $2 billion. These actions are perceived by some as part of the US's intervention in the crypto market. Others believe that these strategic moves aim to reduce the government's crypto assets while impacting market dynamics.
US Government's BTC Holdings
According to data from Lookin Chain, the US government holds approximately 213,546 BTC, valued at around $13.07 billion. This makes the US the largest governmental holder of Bitcoin globally. Governments worldwide, including those of China, the United Kingdom, Germany, and El Salvador, collectively hold around 2.7% of the circulating Bitcoin supply. Notably, the US's recent transfers follow similar actions by the German government, which has been moving Bitcoin to crypto exchanges since last week.
Market Reactions and Expert Opinions
The recent downturn in the Bitcoin market has been exacerbated by sales from government institutions. However, many experts attribute the primary cause of the decline to increased miner sales. Despite this, the US's large Bitcoin holdings continue to create market anxiety. Speculations suggest that the US has the potential to influence market dynamics significantly with its Bitcoin reserves. The recent transfers have sparked concerns about potential panic selling, which could have a more pronounced impact on the market than the actual volume of Bitcoin sold.
Current Bitcoin Market Situation
Bitcoin closed the previous day with a 1.5% drop, falling below $61,000. However, buying activity has accelerated, particularly during US trading hours today. The largest cryptocurrency is currently recovering from yesterday's losses and is moving towards the $62,000 mark.
