The U.S. government moved $2 billion worth of seized Bitcoin (BTC) on Monday, triggering a significant price drop from the recent high of $70,000.
The U.S. government moved $2 billion worth of seized Bitcoin (BTC) on Monday, triggering a significant price drop and raising investor concerns. This action comes just two days after presidential hopeful Donald Trump promised to start accumulating BTC if elected.
The dump came just hours after Bitcoin had finally returned to the $70,000 level, quickly dashing investor hopes that Bitcoin would finally break into the 70,000s and push on to new all-time highs.
Silk Road Coins on the Move
Blockchain data from Arkham Intelligence revealed that a wallet tagged “U.S. Government: Silk Road DOJ” transferred 29,800 BTC related to the Silk Road website to an unknown address with no previous transaction history. Subsequently, the address forwarded 19,800 BTC and 10,000 BTC to two separate addresses. Arkham analysts speculate that the 10,000 BTC transfer, valued at $670 million, might be a deposit to an institutional custody or service. Historically, such movements have often preceded asset sales, however there is no suggestion yet that the coins will be sold.
The transfer caused BTC to tumble below $67,000, extending its decline from a session high of $70,000 earlier in the day. The dump crashed investor hopes that Bitcoin was finally preparing to push on to new all-time highs.
Trump’s Strategic Stockpile
This morning’s government move followed Donald Trump’s weekend pledge at the Bitcoin 2024 conference in Nashville to establish a “strategic national Bitcoin stockpile” if he wins the presidency.
Before this transfer, the U.S. government held $12 billion worth of seized Bitcoin, according to Arkham’s data.
In a recurring trend this year, Bitcoin’s rally to key levels has often been met with a wave of selling. On Monday morning, BTC’s price plunged more than 3% after briefly surpassing $70,000 for the first time since early June.
Traders have observed similar price patterns in 2024. In mid-January, Bitcoin surged to a multi-year high of $47,000 following the launch of spot ETFs, only to reverse within minutes and drop below $40,000 days later. In early March, Bitcoin hit a new all-time high above $69,000 but quickly fell below $60,000. Later that month, another record above $73,500 was short-lived, and that level hasn’t been challenged since.
Despite these fluctuations, technicians might see a bullish pattern of higher highs and higher lows. For example, earlier in July, Bitcoin fell below $54,000 when a German government entity started selling 50,000 seized tokens. Yet, as the end of July approaches, Bitcoin is set to close the month with a significant gain from its early July level of around $63,000.
100 Days Since the Halving
One potentially bright spark for bulls is that July 29 marks the 100th day since the Bitcoin blockchain implemented its fourth mining reward halving. In the past, the post-halving rallies have typically begun to start after 100 days.
Bitcoin mining reward halving is an inbuilt code that takes effect every four years or after 210,000 blocks are mined on the blockchain. This quadrennial event reduces the reward miners receive for validating transactions by 50 percent. The primary goal is to control the supply of bitcoin and ensure it becomes scarce over time, unlike fiat currencies, which experience monetary inflation. Bitcoin’s supply is capped at 21 million, and reward halving helps manage the pace at which this limit is reached.
The first halving, implemented in 2012, reduced the per-block reward paid to miners from 50 BTC to 25 BTC. Subsequent halvings further reduced the reward, with the latest halving on April 20 lowering it to 3.125 BTC. Previous halvings have paved the way for significant price rallies, with most gains occurring after the first 100 days. Will this time be different? Bulls will hope not.
