Speculation Over US Government Bitcoin Holdings Sparks Market Concerns

On Wednesday, speculation was rife regarding the possible sale of thousands of Bitcoins by the United States government. Research director Steven, also known as @Dogetoshi, from The Block, discovered transactions that were labeled as “Gov: DOJ Confiscated funds” in a tweet. However, it later turned out that it was a user mistake and not a government sale. Crypto veteran Adam Cochran supported this and revealed that the user had wrongly tagged the wallet as Silkroad on their local end. As a result, no Arkham alert was sent out to traders or bots.

Despite this, it is important to note that the US government has previously sold more than 9,800 Bitcoins worth about $215 million that were connected to Silk Road at the start of March. According to Blockworks, officials also intend to sell a further 41,500 Bitcoins in four batches throughout the year. This indicates that the US government does possess a significant amount of Bitcoin.

Furthermore, rumors circulated in late April regarding the US government's possible involvement with Bitcoin wallets. Blockchain analytics firm, Arkham, claimed that significant amounts of Bitcoin were transferred by wallets linked to the now-defunct crypto exchange, Mt. Gox, and the US government. Miguel Morel, the CEO of Arkham, stated that these wallet activities were not related, implying that the US government was not responsible for moving or selling Mt. Gox-related assets.

The announcement of the possible sale of US government-held Bitcoins has caused a decline in the price of Bitcoin. On Wednesday, Bitcoin’s price fell sharply from nearly $28,000 to just below $27,000 at around 1:30 p.m. ET. However, as of Wednesday afternoon, Bitcoin’s price had recovered and was closer to $27,700.