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Bitcoin held by the U.S. government is on the move, with about $1.3 billion worth of Bitcoin bars being traded.

There are many theories, but this dip in Bitcoin appears to be the result of US government intervention. On February 2, The Block reported that a wallet address believed to be the source of funds seized by the U.S. Department of Justice (DOJ) in the Silk Road seizure transferred 0.001 BTC to...

Bitcoin held by the U.S. government is on the move, with about $1.3 billion worth of Bitcoin bars being traded.

There are many theories, but this dip in Bitcoin appears to be the result of US government intervention. On February 2, The Block reported that a wallet address believed to be the source of funds seized by the U.S. Department of Justice (DOJ) in the Silk Road seizure transferred 0.001 BTC to Coinbase Prime, a test transaction. The wallet held $2 billion worth of Bitcoin and subsequently transferred 1,999.999 BTC (approximately $131.27 million) to the Coinbase address that made the test transaction and a new address. Including the test transfers, approximately 2,000 BTC was deposited into the Coinbase hot wallet.

The 30,174 BTC seized by the U.S. government from the dark web Silk Road, valued at about $2 billion, are suspected to have started the activity. 29,799 BTC was transferred to a wallet with the address bc1...wzde, and 2,000 BTC was transferred to a Coinbase Prime 3Kr...TvX2 wallet. Of the 2,000 BTC transferred by the U.S. government, 902B BTC ($60 million) was immediately bought by someone, and the wallet address that bought the Bitcoin is a whale that has accumulated 7,454 BTC (about $488 million) at the 65K price point in the last four days.

This smartmoney, which has yet to be specifically identified, seems very likely to be a government-linked smartmoney given that it purchased Bitcoin shortly after the US government transfer, and while many have been concerned for months that the release of the Silk Road seized funds into the market would be a major negative for the market, there are those who argue that the change of hands with the smartmoney is a positive for the market in the long run.

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