Bitcoin drops to around $21,700 ─ US authorities move BTC worth $1 billion, selling concerns spread | coindesk JAPAN | Coindesk Japan

US authorities transferred $1 billion worth of Bitcoin (BTC) recovered in a dark web hack to new wallets, including one owned by Coinbase, on March 7. This has sparked fears that massive selling pressure will drive Bitcoin prices down.

According to blockchain security firm PeckShield, U.S. authorities moved bitcoin in three transactions. About 10,000 BTC was sent to a coinbase-managed wallet, and about $41,000 worth of bitcoin was sent to a government-controlled wallet.

PeckShield posted the move on Twitter in the early hours of the 8th. Investors have expressed concern that the sale of recovered bitcoins by U.S. authorities could cause bitcoin prices to fall, with bitcoin dropping about 2% and briefly dipping below $22,000. .

So far, U.S. authorities have not sold seized digital assets on the open market. The U.S. government typically sells seized assets at auction. In 2014 and 2015, the government auctioned bitcoins seized from black market “Silk Road” owners.

Conor, researcher at cryptocurrency market analytics firm Kaiko, said concerns about Bitcoin selling on the open market may be overstated, but fears that the price might take a hit aren’t unwarranted. Ryder said.

“Moving seized bitcoin from Silk Road to Coinbase was almost certainly done with the intent to sell it, and I can’t help but wonder if bitcoin will face headwinds in the short term.” (Mr. Ryder)

Whether the market can absorb this pressure will likely come down to market composition, said Mark Connors, head of research at digital asset manager 3iq. So who owns and how much cryptoassets has a big impact on how the market reacts to events that could move it.

According to Connors, the current composition of the bitcoin market is more likely to withstand selling pressure than it did during last spring’s Terra collapse crash. This is because the market is less leveraged than it was last year.

Also, the market now has more investors holding more than $1,000 in bitcoin (the so-called whales) than last year, when a flood of retail investors flooded in.

“If there is selling pressure, it should rebound quickly. Compared to the market a year ago, which was characterized by (small holdings) retail investors and high leverage, the current market is a big pullback. It exists.” (Mr. Connors)

That said, Bitcoin prices may still move due to actions by U.S. regulators. The government’s plans for the seized bitcoins are still unclear. It is also still unclear whether the bitcoin will be auctioned or if the bitcoins that have been split and moved will be put together.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Shutterstock
｜Original: US Government’s $1B Bitcoin Transfer Spooks Investors, Bitcoin Dips