Bitcoin, the world’s largest cryptocurrency by Market capitalization, has seen a significant dip in its value, dropping below the $26,500 mark amidst rumours of a US government sale of BTC.
Bitcoin has plunged by over 10% in the past week, becoming its second-worst week since its price tapped a 10-month high of $30,000 last month. The latest dip comes amidst rumours that the US government plans to sell a large amount of Bitcoin from its reserves, potentially flooding the market and driving down prices even further.
BTCUSD Chart by TradingView
As ZyCrypto reported, on March 14th, the US government reportedly sold 9,861 Bitcoin, worth approximately $215 million, seized from criminals involved in illegal activities on the Silk Road website. According to a court filing in April, the US government revealed it further plans to sell another 41,490 BTC in connection with Silk Road in four separate batches this year. The online marketplace facilitated illegal activities and was seized by law enforcement agencies in 2013.
This week has been enough to spook investors and send prices plummeting, with roughly $44 million in BTC being liquidated in the past 24 hours. Meanwhile, independent analysts and research firms refuted the sale claims, with CryptoQuant describing the rumours as “coordinated fake news.”
“Coordinated FAKE NEWS about US government selling Bitcoins leads to second-largest long liquidations in 2023. Many accounts retweeted this news without any fact-checking, and as a result, we saw the second-largest long liquidations in 2023, with over $36M being liquidated within one hour,” Cryptoquant tweeted on May 11.
Arkham, another onchain crypto analytics firm, also distanced itself from the FUD, labelling recent claims showing the said sales with alleged data from its website as false.
“Users on Arkham’s platform can manually add and remove labels for their own private instances. Our platform provides Arkham Entities that can be edited by users in their own sessions. These do not reflect associations with wallets made by the Arkham Team.”
That said, while the US government’s potential sale of Bitcoin has caused a ripple effect in the market, investors should take the news with a grain of salt, considering it is not the first time rumours of the US government selling BTC have circulated.
At press time, the cryptocurrency was trading at $26,301, down 3.30% in the past 24 hours, as per CoinMarketCap data.
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