Bitcoin [BTC] R&D takes center stage when Uncle Sam makes a move
- US government seized Bitcoin holdings began to move, causing FUD
- Short-term owners decreased while long-term owners remained
Over the past few years, the US government has accumulated huge amounts of BTC for law enforcement purposes. This BTC has remained mostly dormant the entire time it was held by the US government. However, according to new data provided by Glass nodethis BTC has now started to move.
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The amount of Bitcoin in circulation is estimated to be around 40k BTC. Of the said volume, 9,861 BTCs were seized from the Silk Road hacker and have been sent to a Coinbase cluster.
Source: glassnode
R&D begins
This behavior of the US government has caused many members of the crypto community to speculate about what this could mean for Bitcoin. Many users are under assumption that the US government will sell these BTC holdings, negatively affecting the value of the cryptocurrency in the process.
Additionally, this move by the government could hurt sentiment around BTC and cause more FUD.
At press time, overall weighted sentiment around Bitcoin was slightly positive. However, if FUD continues to spread, things could take a turn for the worse and the selling pressure on BTC holders will end up increasing.
Source: Sentiment
Although R&D around Bitcoin has been on the rise, long-term holders are less likely to be affected. Based on the decreasing long/short ratio, it can be observed that short-term owners of BTC have started to exit their positions. The MVRV ratio for the remaining long-term holders is negative, meaning that they would not be able to sell their holdings at a profit during this period.
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Therefore, it is more likely that these long-term owners will continue to hold onto their assets until it is profitable to sell their holdings. The decreasing rate is also a sign that a majority of BTC addresses have been HODLing.
Source: Sentiment
Any positive, hopeful signs?
However, one of the reasons addresses may be optimistic about Bitcoin’s future is its performance against other real-world assets. According to analysts, for example, Bitcoin has managed to outperform assets such as gold, silver, US stocks and the US Dollar index.
All the hysteria with the markets pricing in 50 bps for March.
A terminal rate of 5.6% in October, higher for longer calls.
Triple digit inversion, and most inverted since 1980. While an ongoing grayscale case with the SEC. #Gold and #Silver gets crushed. #Bitcoin is… pic.twitter.com/Jc1m417Ym4— James V. Straten (@jimmyvs24) March 7, 2023
It remains to be seen if Bitcoin continues its trajectory to outperform various asset classes and if BTC owners are affected by FUD.
