Bitcoin Drops 5% As US Government Moves $593M in BTC to Coinbase

The U.S. government recently transferred $593.91 million worth of Bitcoin, amounting to 10,000 BTC, to a wallet connected with Coinbase Prime. 

This marks the largest transaction from the government to the exchange this year, as reported by Arkham Intelligence. The funds have raised concerns among market participants due to the impact of previous government-related Bitcoin transfers on the market. 

Notably, Bitcoin’s price has dropped by 4.37% in the past 24 hours, falling to $58,690.

Historical Bitcoin Transfers and Price Drops

This year, as reported by Lookonchain, the U.S. government has transferred 15,940 BTC, worth $966.4 million, to Coinbase Prime in three separate transactions including the recent one. 

The #USGovernment transferred 15,940 $BTC($966.4M) to #CoinbasePrime in three transactions this year.

Within three days of the first two transfers, the price of $BTC both dropped by ~5%.https://t.co/ugCqZSoS46https://t.co/agZkQtiKlIhttps://t.co/0RaZJ2fMs8 pic.twitter.com/EBdPjO7m9C

— Lookonchain (@lookonchain) August 15, 2024

Following two of these transactions, Bitcoin’s price saw significant declines of around 5% within three days. The first transfer occurred on April 2, 2024, involving 1,999.999 BTC worth approximately $131.27 million. The Bitcoin price dropped from $69,705.02 to $67,840.57 shortly after the transfer.

Similarly, another significant transfer took place on June 26, 2024, when the government moved 3,940 BTC, valued at $241.22 million, to Coinbase Prime.

After the transaction, Bitcoin’s price fell from $61,789.68 to $60,888.45 within three days before recovering. These patterns have sparked speculation over the possible effect of the most recent transfer, as it remains the largest transaction in this series.

Government Bitcoin Holdings

Per reports, the U.S. remains the largest geopolitical Bitcoin holder, a fact recently underscored by Donald Trump during his presidential campaign. Notably, if elected, he has vowed to retain the government’s Bitcoin holdings, stirring further discussion on the government’s crypto strategies. 

The 10,000 Bitcoin recently transferred were initially seized in the 2022 raid on the Silk Road marketplace, a major event that has had long-lasting effects on the crypto market.

Impact of Other Government Selloffs

While the U.S. continues to manage its seized Bitcoin, other governments have taken similar actions. In July, the German government sold off 1,000 BTC worth $55.8 million across several crypto exchanges as part of a broader campaign that saw it empty its Bitcoin bag.

Interestingly, despite the typically bearish impact of such sales, Bitcoin was recovering in value during this period, trading at around $57,139.12 after the sale. The German government’s sales initially caused fear in the market, but Bitcoin’s price managed to stabilize and even rise afterward, a notable divergence from the usual trend.