There have been speculations that the US government has sold a significant portion of its Bitcoin holdings following its recent transfer. On-chain data has helped clear up these rumors and showed exactly what the US government did with the $2 billion worth of Bitcoin it transferred.
Did The US Government Sell $2 Billion Worth Of Bitcoin?
Data from the on-chain analytics platform Arkham Intelligence shows that the US government didn’t sell the almost 30,000 BTC it recently transferred. Instead, as Arkham Intelligence noted in a recent X (formerly Twitter) post, the US government simply split the $2 billion worth of Bitcoin into two addresses.
The government sent 19,800 BTC ($1.33 billion) to another of its wallet addresses (bc1qn) and the remaining 10,000 BTC ($669.35 million) to another address believed to belong to an institutional custodian.
As the prominent crypto X account Bitcoin Archive mentioned, moving coins isn’t the same as selling them, and there are situations in which the wallet address in question is simply moving these coins for security reasons or investment purposes.
Moreover, an intention to sell one’s coins is usually indicated by a transfer to a centralized exchange (CEX) since these are the platforms with the most liquidity to handle such sales. However, that isn’t the case in this instance, seeing as the US government didn’t transfer the $2 billion to Coinbase, the CEX it has used in the past to offload some of its Bitcoin holdings.
Meanwhile, it is worth noting that the US government has always been transparent in its Bitcoin sales and usually confirms to the public whenever it sells some of its BTC. The last confirmed sale by the US Marshals service came in March, meaning the US government hasn’t sold any of its BTC since then.
Why Is Bitcoin Dumping Then?
It was easy for the crypto community to speculate that the US government had sold the $2 billion worth of Bitcoin it transferred, seeing how the transfer coincided with Bitcoin’s recent decline. However, the flagship crypto is dumping for several other reasons unrelated to the US government since it has been confirmed that they have not sold any BTC recently.
One reason why Bitcoin’s price is currently plummeting is due to the rising tensions in the Middle East, with Iran looking to retaliate against Israel based on the belief that the latter was responsible for the assassination of Hamas leader Ismail Haniyeh in Iran. Another reason is the supply shock that Bitcoin could face with Genesis recently moving $1.5 billion in Bitcoin and Ethereum.
According to Arkham Intelligence, these transfers are likely for creditor repayments, meaning Bitcoin could witness a wave of significant sell-offs as Genesis repays its creditors. The macro side has also contributed to Bitcoin’s recent downtrend, with the US job growth in July coming in lower than expected.
Featured image from The Defiant, chart from TradingView