Is the U.S. Government Selling Bitcoin? 20,000 Transfer Sparks Panic

Bitcoin’s push toward the $100,000 mark has hit an unexpected roadblock, leaving investors on edge. While major players like MicroStrategy continue to buy in, a recent decision by the U.S. government has raised eyebrows across the crypto world. Nearly 20,000 Bitcoin were transferred to Coinbase, but was it a sale or something else?

Keep reading to find out why experts are calling this a “huge strategic mistake” and how it could impact the cryptocurrency market.

Experts Slam U.S. Government’s Bitcoin Decision

Jason Lowery, a U.S. Space Force engineer, called the transfer a “huge strategic mistake,” pointing out that Bitcoin’s value extends beyond its price. He argued that the government may not fully understand the importance of Bitcoin and warned that it could regret this decision.

Lowery even compared it to the historical Executive Order 6102, which forced Americans to sell their gold to the government in the 1930s, suggesting the government might later reverse its decision.

Coinbase CEO Brian Armstrong also criticized the move, stating that selling Bitcoin doesn’t make sense. Crypto educator Toby Cunningham joined in, calling it short-sighted and adding,

“If they sell, the market will absorb it instantly.”

Sale or Wallet Transfer? The Debate Continues

At this stage, it’s unclear whether the Bitcoin transfer was a sale or part of a larger effort to manage or consolidate Bitcoin wallets. According to Spot On Chain, a crypto analytics platform, the transfer may have been about managing Bitcoin holdings rather than liquidating them.

Julio Moreno from CryptoQuant suggested that only 10,000 BTC may have been sold, with the remaining 9,800 BTC sent to a new wallet. Unlike previous sales that caused sharp drops in price, this move only resulted in a small dip to $95,800, and the market quickly rebounded.

U.S. Government Bitcoin Holdings

Despite the transfer, the U.S. government remains a major holder of Bitcoin, with around 183,850 BTC worth $17.7 billion. Most of this Bitcoin was seized from operations like the takedown of Silk Road. When the transfer was detected, Bitcoin prices dropped nearly 3% to $94,500, but quickly recovered, trading around $96,000 at the time of writing.

Analysts are now watching closely to see if Bitcoin can break through the crucial $100,000 level or if profit-taking and investor diversification will limit the rally.

Here’s the Twist

n an unexpected twist, there’s growing speculation that President Joe Biden may sell off a large portion of the U.S. government’s Bitcoin holdings before leaving office. Some believe this move would make it harder for President-elect Donald Trump to create a U.S. Bitcoin Reserve, a key promise from his campaign. The U.S. holds a significant amount of Bitcoin from asset seizures tied to illegal activities.

If Biden sells these holdings, it could limit Trump’s ability to use them for his reserve without needing additional funds. Some see this as part of a broader strategy, as Biden has used similar tactics in other areas, like foreign aid, to block Trump’s plans.

With each strategic decision, the stakes get higher—Bitcoin’s path forward will likely redefine not just markets, but geopolitics as well.