The crypto market has tanked in the last 24 hours with Bitcoin down to $94k as at the time of this writing and Ethereum down to $3,297. Over $60 billion in total market cap has been reportedly wiped out due to a combination of economic data and the U.S. government selling a ton of Bitcoin.
Market Reaction to U.S. Data
Investors got skittish after U.S. job openings for November came in way higher than expected, pointing to a potentially tight labor market. in response, Treasury yields jumped, with the 10 year note up 5 basis points at 4.693%.
These undercut expectations of possible interest rate cuts from the Fed and have placed additional pressure on risk assets, including cryptocurrencies.
Potential $6.5 Billion in Bitcoin to be Sold
Also contributing to the market jitters was the news that the U.S. government will be auctioning off 69,370 Bitcoins – worth around $6.5 billion – that were seized from the now-defunct Silk Road darknet marketplace several years ago.
Allegedly, District Judge Richard Seeborg of the U.S. District Court for the Northern District of California recently denied a motion to prevent the forfeiture of the seized Bitcoins so the Department of Justice can sell them.
According to CryptoQuant, a blockchain analytics firm, this sale as a test for market liquidity. While the crypto market was able to absorb $379 billion last year, an average of $1 billion daily, the timing of the sale could still be volatile, said CEO Ki Young Ju.
“The $6.5 billion sale could be absorbed in a week,” added Ki.
Blockchain Data & Politics
Despite the impending doom of the sale, no transfer has been made from the wallet holding the Bitcoins yet.
The timing of this development aligns with the inauguration of President-elect Donald Trump, who has said he loves Bitcoin and even promised to create a Bitcoin reserve using seized funds – which could impact the market even more.
Summing Up: Crypto Market Trends
Along with Bitcoin, the overall crypto market has been down 2% in the last 24 hours. Total market cap is at $3.18 trillion.
While the sale is pending, market participants are waiting for any wallet activity to start the Bitcoin transfer.
The market is in a delicate balance between macro, regulations and sentiment. With the prospect of $6.5 billion in Bitcoin to be sold, traders are to get ready for more volatility in the next few days.
Stay updated with Turkishnyradio as we’re available around the clock, providing you with updated information about the state of the crypto world.
FAQ
1. Why is Bitcoin down today?
A bunch of things are pulling Bitcoin down. Reduced expectations of Fed rate cuts and the potential sale of $6.5 billion in Bitcoin by the U.S. government. The sale is from the seized funds of the Silk Road case which is the source of all the uncertainty in the market.
2. Why is the $6.5 billion Bitcoin sale important?
The U.S. government is supposed to auction off 69,370 BTC from Silk Road. If done, this could temporarily disrupt the market by flooding the market with a lot of Bitcoin, in a way increasing the selling pressure temporarily.
3. Has the U.S. government started transferring the Bitcoins?
No, blockchain data shows no transfer has been made from the wallet holding the seized Bitcoins but the market is on high alert for any movement.
4. How will President-elect Donald Trump influence the crypto market?
Donald Trump loves Bitcoin and promised to create a Bitcoin reserve using the confiscated funds. His administration’s crypto policies could impact the market in the next few months.
