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As the price of bitcoin consolidates just below its all-time high of $99,540, a significant move by the US government has raised concerns among investors. The government has transferred a substantial amount of its seized bitcoin holdings to Coinbase, which could indicate selling intentions. This echoes similar actions that had already shocked the market earlier this year.
US Government bitcoin Transfer
<a target="_blank" href="https://x.com/arkham/status/1863629968577630469″ target=”_blank” rel=”nofollow”>According According to market intelligence firm Arkham, the US government transferred approximately 10,000 bitcoin, worth around $1.92 billion at current market prices, to two separate wallets.
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One wallet contains bitcoin valued at $969 million, while the other contains approximately $949 million. This strategic allocation has raised eyebrows, especially given the government's history of selling seized bitcoin, which can create notable selling pressure in the market.
Data from cryptanalysis firm Dune indicates that the US government <a target="_blank" href="https://dune.com/21co/us-gov-bitcoin-holdings” target=”_blank” rel=”nofollow”>currently has a staggering 183,422 btc, valued at more than $17.6 billion. This represents approximately 0.93% of the total bitcoin supply.
If the government decides to sell a portion of these holdings, it could put significant downward pressure on the price of bitcoin, reminiscent of previous sell-offs that followed major transfers.
A halt to government sales in 2025?
Historically, these types of stocks have led to greater volatility. For example, NewsBTC reported In April, when the price of bitcoin reached a high of $73,700, the government transferred more than 30,000 bitcoin seized from the Silk Road market.
This followed an earlier seizure of over 50,000 btc from James Zhong, who allegedly obtained these funds through illegal means related to the Silk Road in 2012. Following these transfers, bitcoin experienced significant price fluctuations and a downward trend over the following months.
In 2022, the government also sold 9,800 btc, with plans to sell an additional 41,500 bitcoin. This story raises concerns that the latest transfer could lead to a similar result, potentially jeopardizing bitcoin's recent bullish price momentum. However, hopes are emerging that such measures could be limited in 2025.
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President-elect Donald Trump is expected to take office on January 20 and has proposed a strategy that includes making bitcoin a strategic reserve asset for the US
This approach would involve the government purchasing nearly 1 million btc rather than selling its current holdings, with plans to use these assets to help reduce the country's $36 trillion national debt.
This proposal has been presented in Congress by US Republican Senator Cynthia Lummis within the framework of the “bitcoin Law”, which has obtained<a target="_blank" href="https://bitcoinist.com/bitcoin-reserve-legislation-gain-bipartisan-support/” target=”_blank” rel=”nofollow”> bipartisan support. With the recent change in leadership from Democrats to Republicans securing a majority in the House, there is optimism that this bill could take effect in the second or third quarter of 2025.
At the time of writing, btc is trading at $96,000, down 0.7% in the last 24 hours.
Featured image of DALL-E, chart from TradingView.com
