Bitcoin’s push towards $100,000 has hit a roadblock, causing investors to rethink their strategies. While big buyers like MicroStrategy are still active, other cryptocurrencies are seeing more attention. The U.S. government’s recent transfer of nearly 20,000 Bitcoin to Coinbase has raised eyebrows, with many experts calling it a bad move, especially as Bitcoin’s global importance grows.
Why Are Experts Criticizing This?
Jason Lowery, a US Space Force engineer, labeled the move a “huge strategic mistake,” arguing that Bitcoin’s value goes beyond price. He compared the sale to an act of ignorance, warning that the government might regret it later. Lowery even suggested a scenario where the government might reverse course, recalling historical decisions like Executive Order 6102, which forced Americans to sell their gold to the government in the 1930s.
Coinbase CEO Brian Armstrong joined the critics, stating that selling Bitcoin makes little sense. Crypto educator Toby Cunningham called it short-sighted, adding, “If they sell, the market will absorb it instantly.”
Was It Really a Sale?
As of now, it’s not clear if it was an actual sale or not. According to Spot On Chain, a crypto analytics platform, the transfer could be related to managing or consolidating Bitcoin wallets rather than liquidating assets. Julio Moreno from CryptoQuant added that only 10,000 BTC might have been sold, while the rest—around 9,800 BTC—was sent to a new wallet. In contrast to earlier sales, which caused sharp price drops, this move only led to a minor dip in Bitcoin’s price to about $95,800.
Despite the transfer, the U.S. government still holds a significant amount of Bitcoin, approximately 183,850 BTC, worth $17.7 billion, largely seized from operations like the takedown of Silk Road
Crypto Impact
When the transfer was detected, Bitcoin prices briefly dipped by almost 3% to $94,500. However, the market quickly recovered, with Bitcoin trading around $96,000 at the time of writing. Analysts are closely monitoring whether Bitcoin can push past the important $100,000 mark or if the rally will be limited by profit-taking and investors spreading their capital into other assets.
Is Crash on Horizon?
With this sudden sell-off plan, there is also a rumor that President Joe Biden might sell off a large amount of the U.S. government’s Bitcoin holdings before leaving office to make it harder for President-elect Donald Trump to create a U.S. Bitcoin Reserve, as he promised during his campaign. The U.S. holds a lot of Bitcoin because of its efforts to seize assets from illegal activities.
If Biden sells this Bitcoin, it could limit Trump’s ability to use it for his reserve without needing extra funds. Some people believe Biden has used similar tactics in other areas, like foreign aid, to block Trump’s plans.
Will this move break the current bull run? We have to wait and watch.
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