Bitcoin retreated from a six-week high as traders shift their focus to speculation the US may sell seized tokens just days after Donald Trump pledged to create a government stockpile of the cryptocurrency if elected president again.
The US moved $2 billion of Bitcoin to a new digital wallet address on Monday, the blockchain research firm Arkham said in a post on the X social media platform. Market analysis firms speculated that the tokens are from the Silk Road marketplace, where customers used virtual currencies to buy illegal drugs and hacker tools before it was shut down.
“Despite the positive news out of Bitcoin 2024 conference pertaining to Trump’s speech and Senator Lummis’ reserve bill, the market still has to deal with very real supply overhangs,” said Shiliang Tang, president of principal trading firm Arbelos Markets.
The largest digital asset rose to just shy of $70,000 on Monday before declining as much as 2.2% to $66,482 in New York.
“Ahead of President Trump’s speech at the Bitcoin Conference this past weekend, the market saw extremely elevated levels of short-term call buying,” said Spencer Hallarn, global head of OTC trading at GSR. “With the passage of the event, as option buyers have looked to close these position,, the same dealers that were buying last week have turned into sellers of Bitcoin, providing a headwind to prices.”
Republican presidential nominee Trump pledged at a weekend conference to make the US the “crypto capital of the planet and the Bitcoin superpower” if he returns to the White House following November’s election.
That prompted some traders to speculate that the movement of the tokens by the government was intentional.
“Tone deaf anyone??? Moving Silk Road BTC two days after Trumps pledge to not move them is just dumb!!!!” Galaxy Digital head Michael Novogratz said on X.
Read more: Fight Inflation With Bitcoin: Cynthia Lummis Calls For US To Buy 1 Million BTC
Trump also said that he will order the US government to refrain from selling crypto seized in criminal cases and instead use the tokens as the basis for what he called a strategic Bitcoin stockpile.
The former president’s speech at the Bitcoin event in Nashville cemented the original cryptocurrency “as a key election trade,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
Meanwhile the Fed meeting later this week is expected to lay the groundwork for the start of a rate-cutting cycle, a prospect that lifted the mood in markets.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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