- The US government has moved 10,000 Bitcoin seized from Silk Road to Coinbase Prime.
- BTC is down over 3% following the move, while US CPI data suggests the possibility of the Fed cutting rates.
- Bitcoin's price movement has often shifted with changes in BTCE reserves, a pattern that has altered recently.
Bitcoin briefly dropped below $59K on Wednesday following news that the US government had moved 10,000 BTC to Coinbase Prime. On-chain data also shows a trend change in Bitcoin's price correlation to the BTCE fund reserves.
Bitcoin down as US Government moves 10,000 BTC
According to data from Arkham Intelligence, the US Government reportedly transferred 10,000 Bitcoin — equivalent to $591 million — to Coinbase Prime on Wednesday.
The wallet, which bears the name "US Government: Silk Road DOJ," made the initial transfer two weeks ago and again transferred the funds to Coinbase Prime today.
The funds are suspected to come from the confiscated Silk Road BTC after a previous transfer of $2 billion Bitcoin in July. Following the report, Bitcoin dipped slightly below $59K.
The decline also coincides with the release of July's US Consumer Price Index (CPI) inflation data. The CPI came in at 2.9% YoY — below expectations and the lowest rate since 2021. The declining inflation increases the chances for the Federal Reserve to cut interest rates in September.
As a result, several investors anticipate a price rally across digital assets in the coming weeks as risk assets like cryptocurrencies often see price growth in a lower interest rate environment.
Meanwhile, on-chain analytics provider CryptoQuant released an analysis revealing a correlation between Bitcoin's price movement and the fund behavior of Germany's ETC Group Physical Bitcoin (BTCE). The price of Bitcoin often rallies when the reserve increases and falls when the reserve declines.
BTCE Fund Holdings
This historical pattern appears to have been altered since January after spot Bitcoin ETFs launched in the US, as the drop in BTCE reserve has had little impact on Bitcoin's price. This indicates shifts in market dynamics or other influences that warrant a deeper analysis.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Shiba Inu has potential for rally but faces key technical hurdles
Shiba Inu is down 0.1% on Wednesday following loss of a key accumulation zone. Meanwhile, its on-chain and technical indicators suggest potential for a brief rally. According to data from IntoTheBlock, nearly 73% of SHIB tokens are held at a loss.
Trump tokens dip following interview with Elon Musk, Kamala Harris gains support on Polymarket
Meme tokens based on former President Donald Trump experienced sell-offs on Tuesday following no mention of crypto during his interview with Tesla CEO Elon Musk on Monday.
Ethereum risks 25% decline if it fails to overcome key trendline as investor accumulation continues
Ethereum is up more than 2% on Tuesday following minor inflows across ETH ETFs. ETH technical indicators suggest that its price could approach the $2,000 psychological level in the coming weeks, but investors' accumulation may prevail.
Bitcoin shows signs of recovery as Bitgo begins final Mt. Gox distribution
Bitcoin (BTC) is up over 3% on Tuesday as investors reacted positively to the final lap of Mt. Gox supply pressure. Meanwhile, Glassnode data reveals investors have resumed accumulation, hoping to see Bitcoin record higher prices.
Bitcoin: Can BTC bounce back from recent market crash?
Bitcoin (BTC) trades above $60,000 on Friday after a 7.2% decline and a dip below the $50,000 level earlier in the week, following a test of its daily support level at around $49,900 on Monday.