Blockchain data indicates two wallets that belong to the US Department of Justice moved a large amount of Bitcoin on Wednesday.
In three separate transaction, the wallet admins moved 9,825 BTC, over $300 million at the time of writing. Bitcoin closed at -2% on Wednesday, falling to $30,180 on the day.
Bitcoin trader and analyst John Brown noted that these distribution events “will likely be the last opportunities to scoop large amounts of Bitcoin.”
Three large coin distributions remain: (1) From Silk Road seizure, (2) from Mt. Gox hack, (3) from Bitfinex hack.
These events will likely be the last opportunities to scoop large amounts of Bitcoin.
— John Brown (@john_j_brown) July 12, 2023
A fourth event by way of a possible ‘Grayscale unwind’, as mentioned in the comments, could also impact the Bitcoin market short term.
In November 2021, the US government seized over 50,000 BTC from James Zhong, who pleaded guilty to hacking coins from the dark web marketplace Silk Road about 10 years ago.
In March, the US government dumped 9,861 BTC and revealed that it planned to sell the rest in four instalments throughout 2023.
Director of the Internal Revenue Service’s cybercrime unit, Jarod Koopman, said in an interview with CNBC that “We don’t ever want to flood the market with a tremendous amount, which then could have an effect on the pricing component.”
The government employed the replace by fee function in the transfers made on Wednesday, which is meant to allow Bitcoin users to speed up transaction execution during periods of network congestion by replacing an earlier transaction with one that has a higher charge.
So far, the government has used Coinbase to execute the trades, an exchange that’s under fire from the US Securities and Exchange Commission (SEC) for allegedly operating an unregistered securities exchange.
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