Bitcoin Price Falls on Reports of US Government Moving $2 Billion Worth of Tokens

Bitcoin price fell on Tuesday, reversing a weekend rebound as reports of the U.S. government mobilizing $2 billion worth of tokens overshadowed positive comments on regulation from Donald Trump.

The world’s biggest cryptocurrency had surged to $70,000 on Monday following Trump’s promise of friendlier regulations at the Bitcoin Conference. However, it quickly dropped 4.7% in the past 24 hours to 66,422.1 as concerns over government token movements emerged.

Media reports indicated that the U.S. government had transferred $2 billion worth of seized Bitcoin on Monday, sparking fears of increased selling pressure on the token. This move, involving 29,800 tokens, raised worries of a potential sale similar to the Mt Gox exchange incident in July.

Despite the setback, Bitcoin had rebounded from previous lows of $54,000, with the U.S. government holding approximately $12 billion worth of confiscated tokens, mainly from the Silk Road marketplace.

Trump assured that under his presidency, the government would not sell any of its holdings but did not confirm plans for a strategic reserve of Bitcoin. He also pledged to ease regulatory conditions for crypto, contrasting with Democratic frontrunner Kamala Harris.

In addition to Bitcoin’s decline, other cryptocurrencies followed suit on Tuesday amid caution ahead of a Federal Reserve meeting. Altcoins like Ethereum, Binance Coin, and Dogecoin experienced losses ranging from 1.7% to 6.1%.

The broader risk-off sentiment in the crypto market was further fueled by uncertainty surrounding the Fed meeting, where traders awaited signals on potential interest rate cuts. Despite the recent launch of spot exchange-traded funds, the crypto market remained under pressure as investors navigated through regulatory and economic uncertainties.