The Bitcoin market braces for potential turbulence as the US government executes a substantial transfer of seized Bitcoin to Coinbase. With Bitcoin’s price hovering near its all-time high of $99,540, this move stirs concerns of a market sell-off.
US Government’s Strategic Bitcoin Moves
Recent data from market analytics firm Arkham revealed that approximately 10,000 Bitcoin worth an estimated $1.92 billion has been transferred to two wallets. The first holds Bitcoin valued at $969 million, while the second contains $949 million. Historically, such transfers have foreshadowed government sales, which often exert downward pressure on Bitcoin prices.
According to Dune Analytics, the US government controls 183,422 BTC worth over $17.6 billion, representing nearly 0.93% of the total Bitcoin supply. Should these holdings hit the market, the selling pressure could impact Bitcoin’s ongoing rally, much like previous instances.
Historical Precedents of Market Volatility
In April 2024, Bitcoin reached $73,700 before declining after the government transferred over 30,000 BTC seized from the Silk Road marketplace. Similar outcomes followed the sale of 50,000 BTC linked to the James Zhong case and the government’s 2022 divestment of 9,800 BTC, which signaled a bearish trend in subsequent months.
Hope for a Policy Shift in 2025
The incoming administration of President-elect Donald Trump may signal a new era for Bitcoin. Under the proposed “Bitcoin Act,” introduced by Senator Cynthia Lummis, the US government could make Bitcoin a strategic reserve asset. The plan envisions the purchase of 1 million BTC to reduce the nation’s $36 trillion debt, shifting focus from sales to accumulation.
This bipartisan-backed bill is expected to gain traction in Q2 or Q3 2025, potentially marking a turning point in government handling of cryptocurrency assets.
Bitcoin’s Current Status
At the time of writing, Bitcoin trades at $96,000, down 0.7% in the last 24 hours. As the market watches closely, any developments could trigger significant volatility, especially as history suggests government actions often ripple through the market.
