The U.S. government transferred 19,800 Bitcoin worth $1.9 billion to Coinbase Prime, sparking concerns across the cryptocurrency community.
Analysts reported the transfer involved 10,000 BTC to Coinbase and 9,800 BTC to a newly created address, with unclear intentions.
Bitcoin's price dipped nearly 3% to $94,500 following the transfer but quickly recovered to $96,000 shortly after.
The United States government’s recent transfer of 19,800 Bitcoin, valued at $1.9 billion, to a Coinbase Prime deposit address has activated widespread reactions within the crypto industry. The transaction, conducted on December 2, represents part of of Bitcoin movements by the government in 2023, totaling 25,999 BTC worth approximately $2.49 billion. Observers and industry executives have raised questions about the intent behind these transfers and their possible implications.
Concerns Over Bitcoin Sales
Jason Lowery, a United States Space Force major and author of Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin, described the decision as a huge strategic mistake on his X account.
https://twitter.com/JasonPLowery/status/1863669823265178103
Lowery emphasized that Bitcoin represents a technological and strategic asset, criticizing the lack of understanding shown by the government in handling its holdings. He also warned that selling Bitcoin today could lead to future efforts to reclaim it, referencing historical parallels with Executive Order 6102, which banned gold hoarding in 1933.
Coinbase CEO Brian Armstrong echoed these concerns, agreeing that the U.S. government should avoid selling its Bitcoin holdings. Crypto educator Toby Cunningham added that market participants would likely absorb any government sale quickly.
Bitcoin Transfers, Prices, and Custodial Actions
The December 2 transfer involved two separate movements. Analytics platform Spot On Chain reported that 10,000 BTC were sent to Coinbase Prime, while the remaining 9,800 BTC were moved to a newly created address.
Experts have indicated that the transactions may involve custody or wallet consolidation rather than outright sales. Tether strategy adviser Gabor Gurbacs stated that no official auction or sale information has been confirmed via X Platform, leaving the purpose of the transfers uncertain.
Bitcoin’s price dipped nearly 3% to $94,500 following the large-scale transfer but recovered to $96,000 shortly thereafter. Spot On Chain estimates that the U.S. government holds 183,850 BTC, worth approximately $17.7 billion, across multiple known addresses. This movement has reignited discussions on how the U.S. government manages its cryptocurrency holdings and the broader implications for the market.
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