Bitcoin and Ether Prices Drop After Government Bitcoin Transfer

YEREVAN (CoinChapter.com) — Bitcoin's price took a hit on Wednesday after the U.S. government transferred approximately $240 million worth of seized BTC to a Coinbase Prime address.

The United States government has transferred about 3,940 Bitcoin, which were seized from a vendor on the darknet marketplace Silk Road, to a Coinbase Prime address. This move has sparked fears among traders that the assets might be sold soon.

According to Arkham Intelligence, the U.S. Marshals Service moved the BTC, currently valued at around $240 million, on Wednesday. These assets were confiscated from Banmeet Singh, a narcotics trafficker, at his trial in January 2024, after he pleaded guilty to narcotics trafficking conspiracy.

Traders are now speculating that the government might sell these coins, given the substantial amount involved. The last time the government sold BTC, in March 2023, it unloaded 9,861 coins for $216 million. That sale put considerable pressure on the market at the time.

The U.S. government has seized a total of about 50,000 Bitcoin in connection with the Silk Road website, over the years. A significant event in this regard occurred on April 2, 2023, when $2 billion worth of Bitcoin was transferred, leading to a notable dip in the digital markets.

These historical events help put the current market reactions into perspective. The fear of a government sale often triggers a sell-off among traders, leading to price drops. The government's recent movement of seized assets is continuing to create ripples in the cryptocurrency market.

Bitcoin and Ether prices slipped on Wednesday after the U.S. government transferred seized BTC to a Coinbase address, sparking fears of a potential sale.

Bitcoin attempted a modest bounce from its earlier tumble related to Mt. Gox but slipped back below $61,000 as the news hit the market. However, it edged back up to $61,100 by early afternoon in New York, showing a 1% decrease over the past 24 hours. The broader CoinDesk 20 Index also declined by about 1%.

Ether fell by 1.6% on the day to $2,040.

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