- US Government has moved about 49,000 BTC from Silk Road to Coinbase.
- Industry leaders are concerned the move may be connected to an imminent dump-off.
The broader crypto ecosystem was thrown into a semi-panic mode with revelations that the United States Government has started moving large sums of Bitcoin (BTC) that was seized from Silk Road back in 2021 and March 2022 in what appears as a move to dump.
The update was first shared by PeckShield, a crypto analytics, intelligence, and security platform and the outfit pointed out that approximately 49,000 BTC units were transferred to Coinbase. The choice of Coinbase is understandable seeing the platform is the biggest in the United States which also doubles as a publicly traded firm.
#PeckShieldAlert 49k $BTC (worth $1 Billion) from wallets related to US Government law enforcement seizures have been transferred to #Coinbase (~9.8k $BTC, worth $217M), bc1qf2…fsv (30k $BTC) & bc1qe7…rdg (9k $BTC) #SilkRoad pic.twitter.com/4MzlvDzkut
— PeckShieldAlert (@PeckShieldAlert) March 8, 2023
The reasons for the fund’s movements are, however, unclear at this time but speculation is swelling in the industry that a mega selloff might be on the horizon. The total funds seized from the Silk Road at the time topped 51,000 units, thus making the transferred funds of much concern to everyone observing.
Exchanges are known to have the required amount of liquidity to offload such a large amount of digital currency. While the transaction may be split into phases, the eventual selloff will undoubtedly topple the balance in the highly volatile crypto industry.
At the time of writing, the market is already pricing in the Fear, Uncertainty, and Doubts (FUD) associated with the impending selloff of the assets. Bitcoin is changing hands at a spot price of $22,029.83, down by 1.62% over the past 24 hours and by more than 6% in the trailing 7-day period.
American regulators are always advocating for investor protection and a number of industry experts might be giving the regulator the benefit of the doubt with respect to its plans to offload such an amount of Bitcoin all at once.
Unending FUD Surrounding Bitcoin Dump
While Bitcoin can be regarded as one of the top crypto assets with a widespread ownership base, the fear of a large number of holders selling their bags is always upsetting the market. In all, the industry notes a few Whales with a high tendency of selling off their assets and these include American business intelligence and software firm, MicroStrategy Incorporated which has more than 130,000 Bitcoin units.
Additionally, Digital Currency Group’s subsidiary, Grayscale Investments also has a large amount of Bitcoin holdings pegged around approximately 600,000 coins. While Michael Saylor founded MicroStrategy and has promised not to sell its bags soon, there is a lot of uncertainty surrounding the fate of the Bitcoins being held by Grayscale.
With the bankruptcy of Three Arrows Capital (3AC) and FTX Derivatives Exchange hitting Grayscale hard, the crypto empire has now been thrown into a financial mess that many fear the easy way out will be to offload the BTC within its reach.
While the crypto ecosystem is known to be resilient irrespective of the challenges, any major move from US regulators or DCG, traders will need to watch and trade with caution in the meantime.
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