Bitcoin Price Crashes as US Government Transfers $2 Billion Worth of BTC

The price of Bitcoin, the largest cryptocurrency by market cap, has crashed to the $67,000 level, according to Bitstamp data. 

The price slump came after the US government transferred roughly $2 billion worth of BTC, according to data provided by Arkham Intelligence. 

The coins that were recently moved by the U.S. government were confiscated from Silk Road, a now-defunct darkweb marketplace. It was shut down by the FBI back in 2013, with its vast Bitcoin holdings being confiscated. 

Earlier today, the Bitcoin price came close to the $70,000 level. However, the bulls suffer from another rejection. 

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An overreaction? 

The U.S. is the largest holder of Bitcoin among world governments with $13.9 billion worth of Bitcoin. The Chinese government comes in second place with $13 billion. The German government used to be in fourth place by total Bitcoin holdings after confiscating 50,000 BTC from the operators of a famous piracy website. However, it moved to liquidate all of its holdings, putting extreme pressure on the Bitcoin price. Many Bitcoin proponents, including a member of the German parliament, have criticized the selling spree, arguing that the government should keep holding Bitcoin due to its hedging and diversification properties.   

Will the same happen this time around? According to Arkham, the U.S. government split its Bitcoin holdings into two addresses. Hence, the U.S. is unlikely to liquidate this sum since they were sent for custody. 

The U.S. Marshals Service (USMS) announced a partnership with cryptocurrency exchange Counbase in order to safeguard its cryptocurrency holdings.