• U.S. authorities moved $1 billion worth of bitcoin recovered from a dark web hack to new wallets, including one owned by Coinbase.
• Investors expressed fears that authorities would sell the recovered bitcoin on the open market, potentially tanking the token’s price and causing it to dip below $22,000.
• In the past, authorities have usually sold seized assets at auction.
U.S. Government’s $1B Bitcoin Transfer
The U.S. government recently transferred $1 billion worth of bitcoin (BTC) recovered from a dark web hack to new wallet addresses, including one owned by Coinbase-controlled wallets on Wednesday. This movement sparked investor fears that intense sell pressures could drive down the token’s price and cause it to dip below $22,000 per token.
Investor Fears
Investors quickly noticed this movement and began expressing their fears that authorities would sell the recovered bitcoin on the open market which could potentially tank its price even further than its two-year low of roughly $15,500 in November 2019.
Authorities‘ Past Handlings
In regards to authorities‘ past handlings of seized digital assets, they usually sell them at auction instead of an open market sale which could be a departure from what has been done before in similar situations (such as in 2014 and 2015 when government auctioned off bitcoin seized from Silk Road).
Risk of Open Market Sale
Though concerns about selling these tokens on an open market may be overblown, there is still a risk that it could happen which has caused investors to worry about potential dips in bitcoin prices due to this news breaking out in early Wednesday morning hours after PeckShield published their findings on Twitter.
Conclusion
Overall, investors have taken note of this large transfer of bitcoins held by U.S., prompting fear that any sale of these tokens on an open market could lead to decreases in value for BTC and other cryptocurrencies alike as they are all interconnected and can suffer repercussions when news like this breaks out into mainstream media outlets such as CoinDesk or Twitter where many people follow cryptocurrency trends closely throughout each day/week/month etc..