On April 9, The U.S. Government Transferred Thousands Of Btc Tied To An Old Conspiracy-Linked Case
On April 9, the U.S. government has made a large movement regarding the seizure of assets from a conspiracy case in the early 2010s, resulting in a large number of BTC transactions being made.
Key Takeaways
In the past week, the US government made a large transfer of Bitcoin BTC/USDT that was seized from a criminal conspiracy case back in the 2010s. It's important to remember that large government transfers of Bitcoin do not always cause immediate sell off; historic data supports this statement. In fact, the fear created by these types of movements typically outweighs their actual impact.
Understanding how government custody of Bitcoin works may prevent you from panicking and selling at the wrong time. If you are worried about protecting your portfolio in the face of news like this, you should take these three steps to protect your investment.
Introduction
You read the headline. You felt a little uneasy. "U.S. Government Sells Off Thousands of BTC" – and now everyone is talking about how the market is set for a crash.
The problem here is that while your concerns are totally valid, they are exactly the kind of concerns that make everyday investors lose money.
As mentioned by blockchain analysts, on April 9, the U.S. government has made a large movement regarding the seizure of assets from a conspiracy case in the early 2010s, resulting in a large number of BTC transactions being made.
While there might seem to be nothing more than suspicion behind the government move, there is something that you should be aware of if you are thinking of selling off your cryptocurrency portfolio.
Let us discuss everything you need to know – calmly and clearly.
What Actually Happened on April 9?
A significant amount of BTC that came from various criminal investigations ofthe DOJ are being moved from one wallet to another through various wallet addresses associated with the DOJ using the blockchain tracing tools, which results in hundreds of thousands of BTC being transferred through custody accounts. All these transactions have their origins in cases that were prosecuted during the decade of 2010 to 2019; when darknet markets and conspiracy crimes were on the rise.
These transactions were not done in secret, they were carried out as part of normal government process for the following reasons:
a) to move seized digital assets from one custody wallet to another for security upgrades,
b) To prepare assets for auction through the U.S. Marshals Service,
c) to consolidate and combine multiple wallets with different case numbers consolidating and making them easier to manage,
d) As part of legal or court ordered liquidations for seizure cases.
Nothing about this movement means that there is going to be a BTC-supply available on the market at this point, but that there may be a price change in the market as people fear the impending arrival of this BTC-supply.
Why Does This Trigger "Sell-Off" Panic — And Is It Justified?
The market thrives on emotions just as much as reason does. Seeing a government dealing with lots of BTC prompts the mind to think, "It’s going to dump everything and cause the price to drop."
That's not completely irrational either, since the American government had previously sold confiscated Bitcoin on the market. This includes the famous Silk Road takedown in which Bitcoin was sold at auction, with venture capitalist Tim Draper acquiring close to 30,000 BTC and declaring it his greatest decision ever.
Did the market tank as a result of that auction? Nope. Definitely not on a permanent basis, and certainly not in a significant manner.
Here is an important trend for you to remember:
The pattern is clear. Government moves create noise. Auctions create temporary pressure. Neither one rewrites the long-term story of Bitcoin.
3 Steps to Protect Yourself When Government BTC News Breaks
1. Check Before Acting: When you see something that concerns you regarding your investment, the first thing to do is check on-site tracking. Go to on-chain websites like Arkham Intelligence and/or Glassnode to make sure the coins have been transferred to an exchange. If they haven’t been transferred to an exchange, then it’s time to take another look at what the fiat government has done. If they have been transferred to an exchange, then you need to pay very close attention to the situation from that point forward.
2. Review Historical Patterns: History has shown that whenever the government moves large amounts of bitcoin (i.e. the past, present, and/or future), it typically induces a lot of short-term fear. But historical data will tell you that most of the time, the amount of bitcoin sold off is nowhere near what the media would have you believe. If you actually look at all of the major events, and analyze the previous six months of price movement prior to each event, you can see that the market has always overreacted to news headlines and/or events over time.
3. Stay With Your Strategy: If you had a reason for holding onto your bitcoin as of April 9, 2021, then that same reason still exists today. Historically speaking, panic selling when the government has induced dips after moving large amounts of bitcoin has been one of the costliest things for retailers. Set your levels now and, more importantly, know how much risk you want to assume. Don’t change your plan because of last night’s news.
The Emotional Reality Nobody Talks About
Here’s one thing that the financial media won’t tell you straight up – these moments are meant to be urgent. Urgency forces people into quick actions. Quick actions typically translate to rushed decisions. And rushed decisions are what allow seasoned players to get their hands on your BTC at bargain prices.
The people who ended up winning following all of the past government actions on cryptos were those who did not rush into anything.
They simply observed and verified facts before making their decisions.
And that takes discipline.
In cryptos, discipline is a rare commodity.
What Happens Next — And What to Watch
No one has a definitive answer as to what the government will do with the coins they have in possession. So, what should you follow?
- Official DOJ announcements of upcoming bitcoin auctions.
- Inflow data at exchanges; especially if the wallets controlled by government agencies are transferring funds to Coinbase or Kraken for the purpose of sale.
- Any discussions within Congress regarding a proposed U.S. bitcoin strategic reserve that would allow the government to hold rather than sell.
The last point is extremely important: it appears as if there is increasing momentum in Washington, D.C., to think of seized bitcoin as a strategic asset for the USA, as opposed to liquidating it. If this shift continues to have momentum, the entire 'sell-off' story will be completely transformed.
Conclusion
With the Bitcoin event that occurred on April 9, fear was definitely the emotion felt by many people, and there is nothing wrong with it. With such a massive change in thousands of BTC in government wallets, one cannot but feel scared. However, I hope you already know the full history of the mentioned events.
Before panicking and making any conclusions about this or that situation, make sure to verify the information at hand. Learn the distinction between moving funds out of one wallet into another and a real market dump. Follow three steps in case of the panic headlines. And most importantly, keep in mind that every time regular investors flee from the news about the government's actions related to Bitcoin, savvy investors see opportunities.
Remember the initial promise made in the article? It's done.
Your next move should be obvious – set an on-chain alert for government-related wallet transactions.
