This month, the U.S. government sold over 9,861 bitcoin - that it confiscated previously - for nearly $216 million. This came after the arrest of James Zhong who had been charged for wire fraud for manipulating the transaction system on the dark net market known as Silk Road, back in 2012. The government is planning to liquidate the remaining amount of bitcoin, 41,490 BTC, in four tranches this calendar year, according to a recent filing.

The sale of such a huge amount of bitcoin by the U.S. sent shockwaves through the traders which caused the price to fluctuate significantly. After the news broke and over $200 million worth of bitcoin transferred to Coinbase, the price increased to levels of 9.7%. Shortly after though the price returned to normal. Currently the digital currency is trading at range highs of $28,400.

Cryptocurrency has always been subject to fear, uncertainty, and doubt when it comes to governments selling large amounts of the digital asset. This provides a massive injection of liquidity into the market and puts immense pressure on the price. It is an essential factor to keep in mind when investing in the space and one should always be aware of possible selling from the governmental side. Although, this selloff did not render any negative effects as the currency is still trading at high levels.



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