How can the USA government be responsible for the latest drop in BTC price (again)? Let us explore.
Bitcoin (BTC) has been a hot topic of debate among investors, regulators, and financial institutions in recent years. While many have embraced it as a new form of currency that could change the financial world, others remain skeptical and view it as a bubble waiting to burst. In recent news, the US authorities transferred $1 billion worth of Bitcoin recovered from a dark web hack to new wallet addresses, including one owned by Coinbase, which has stoked investor fears that intense sell pressures could drive down the token's price.
Sell at auction?
While this is not the first time that the US government has seized and sold off digital assets, the fear is that the government could choose to sell the Bitcoin on the open market, which could lead to a significant drop in the price of Bitcoin. Historically, when the government has seized digital assets, they have typically sold them at auction rather than on the open market. However, if the government were to sell a large amount of Bitcoin on the open market, it could potentially cause a panic among investors and lead to a sharp decline in Bitcoin's value.
One of the reasons why the US government may be choosing to sell the seized Bitcoin on the open market is due to the recent surge in Bitcoin's price. By selling the seized Bitcoin on the open market, the government hopes to deter cybercriminals from using it as a means of payment and disrupt their illicit activities. And of course to makes some money...
While fears of the US government selling Bitcoin on the open market are not entirely unfounded, selling the BTC will in my opinion do more good than bad. I personally don't want the government to hold such a huge amount of BTC. BTC belongs to the people.
In conclusion, while the US government's decision to sell seized Bitcoin on the open market could potentially lead to a drop in its value, the fear of that happening is larger than the actual selling would be.
The government's decision to sell the Bitcoin remains to be seen how this will affect Bitcoin's price in the long term.