US Government’s Bitcoin Actions
The United States government recently moved $2 billion worth of Bitcoin. This action happened two days after Presidential candidate Donald Trump declared at the Bitcoin 2024 conference in Nashville, Tennessee, that the US would not sell any of its Bitcoin if he were re-elected.
According to Arkham Intelligence, a blockchain analysis firm, the government transferred 29,800 Bitcoins to an unknown wallet on July 29. The funds were then moved to another undisclosed wallet.
Trump’s speech at the Bitcoin 2024 conference included a vow to hold onto the government’s Bitcoin stash. He added he would create a roadmap for crypto-friendly reforms, including ousting Gary Gensler from his position as Chair of the Securities and Exchange Commission.
Furthermore, Senator Cynthia Lummis introduced legislation to make BTC a strategic reserve asset for the United States. Lummis’s proposal includes the US purchasing 5% of BTC’s total supply and holding it as a Treasury asset. She likened this plan to the historic Louisiana Purchase of 1803, where the US acquired a large portion of land from France for $15 million.
Crypto Community Reacts
Despite Trump’s and Lummis’s pro-crypto stances, the government’s recent BTC transfer has sparked mixed reactions. Binance’s head of VIP and institutional services, Catherine Chen, stated that clear positions from influential figures could lead to more regulatory clarity for the crypto market.
Chen also mentioned that Binance has implemented a Capital, People, Technology (CPT) Framework. This framework aims to identify structural factors affecting market dynamics.
According to Chen, the establishment of strategic Bitcoin reserves could positively impact all three categories of the CPT Framework. However, Galaxy Digital CEO Mike Novogratz criticized the government’s Bitcoin transfer, calling it “tone deaf.”
Currently, the US government holds about $12 billion in BTC, most of which comes from seizures and confiscations of crypto assets from criminal activities. Ari Paul, Chief Information Officer at BlockTower Capital, opined that the likelihood of BTC becoming a reserve asset for the US within the next four years is a 10:1 odd.
Bitcoin Price Action
On July 30, the cryptocurrency’s price hovered around $66,500 after an initial surge was met with strong resistance. This rejection led to a rapid decline of nearly 6%, wiping out approximately $4,000 from its value.
Despite the bearish turn, analysts remain optimistic about Bitcoin’s future price movements. Keith Alan, co-founder of Material Indicators, noted that BTC’s flipping of the previous all-time high of $69,000 into a firm support level is crucial.
Alan added that this flipping is essential before BTC can aim for new all-time highs. Famous trader Roman highlighted that the $60,000 to $64,000 price levels are critical as a drop to this range could trigger a short squeeze. Mark Cullen, another well-known trader, noted that the key question now is whether Bitcoin will find support at its current trendline and retrace upwards or continue to drop toward lower levels.
Holders Opt for Long-term Gain
Meanwhile, data from the leading on-chain analytics platform, CryptoQuant, showed an exciting trend in Bitcoin exchange withdrawal patterns. Analyst CryptoOnchain noted an increase in the mean amount of BTC per exchange withdrawal transaction.
According to the analyst, this trend has been ongoing since February, suggesting that more significant amounts of BTC are being moved off exchanges. Typically, such outflows are often a positive indicator, as they signal a reduction in selling pressure and possible price appreciation. Moreover, it is a sign that investors are moving their holdings into long-term storage, anticipating higher prices in the future.