Crypto prices drop as risk-off bets grow, while US government cleared to sell billions in Bitcoin
DATA from CryptoCompare shows that over the last week, the price of the flagship cryptocurrency Bitcoin (BTC) dropped by more than 4% amid a wider retreat from risk assets as the dollar rises and Treasury yields grow. Bitcoin is currently trading at $91,000.
Ethereum’s Ether - the second-largest cryptocurrency by market capitalisation - underperformed and saw a drop of more than 8% over the past week, going from around $3,360 to now stand at $3,070.
Headlines in the cryptocurrency space this week focused on the growth of the Bitcoin network, pointing out that its transaction volume over the past year topped the $19 trillion mark, more than doubling the $8.7 trillion settled over 2022.
Pierre Rochard, vice president of research at Riot Platforms, shared data indicating that the network’s transaction volumes reached nearly $47 trillion during the 2021 bull market. However, they experienced a significant decline in 2022 and 2023.
Over the past year, Bitcoin saw various major developments, including the launch of spot exchange-traded futures (ETFs) in the United States and a break above the $100,000 mark for the first time ever.
Major corporate holders of the cryptocurrency have doubled down on their accumulation strategy, with its largest corporate holder, MicroStrategy, announcing plans to raise up to $2 billion through preferred stock offerings to fuel additional purchases, and Japanese investment firm Metaplanet declaring its plans to acquire 10,000 BTC.
Meanwhile, Bitcoin miners in America have been accumulating BTC reserves to safeguard themselves against tightening margins in an increasingly competitive market. Since November, companies such as Mara Holdings, CleanSpark, and Riot Platforms have raised over $3.7 billion from investors, which they have utilized to purchase additional coins.
US government cleared to sell $6 billion in seized Silk Road BTC
Over the week, the US government was cleared to sell 69,370 BTC worth more than $6 billion that were seized from the now-defunct Silk Road darknet marketplace. According to court documents, Chief U.S. District Judge Richard Seebord denied a motion to block the forfeiture of the seized BTC, clearing the US Department of Justice to sell the seized Bitcoin.
The sell-off might be happening just before President-elect Donald Trump takes office, who during the campaign advocated for a pro-crypto stance and proposed the establishment of a strategic Bitcoin reserve using the seized funds.
This week also saw a Bitcoin investor from Texas have to relinquish access to his cryptocurrency holdings by handing over the private keys and access codes to his wallet in a landmark case.
The case came after the investor reportedly underreported capital gains on more than $3.7 million in BTC sales between 2017 and 2019, leading to a two-year prison sentence being handed down in December after he was sentenced for tax fraud.
Meanwhile in Canada, Prime Minister Justin Trudeau has recently announced that he is stepping down, in a move that could clear a path for a less crypto-resistant government in the country as the frontrunner to lead the country has once vowed to make the country a “crypto capital.”
Trudeau has faced widespread criticism within the cryptocurrency community due to government sanctions imposed on cryptocurrency wallets during the 2022 Freedom Convoy protests.
As Canada prepares for its general election in October, the Conservative Party’s Pierre Poilievre holds a significant advantage. Poilievre, a vocal cryptocurrency advocate who once pledged to transform Canada into a “crypto capital,” has recently maintained a relatively low profile on the subject.
Bhutan SAR to incorporate BTC, ETH, and BNB into strategic reserves
Gelephu Mindfulness City (GMC), a special administrative region in Bhutan, has unveiled plans to integrate cryptocurrencies, including Bitcoin, Ether, and BNB, into its strategic reserves.
Announced on Wednesday, this initiative aims to position GMC as one of the world’s pioneering jurisdictions to officially hold cryptocurrency reserves. The goal is to enhance economic resilience while capitalising on existing Bitcoin mining operations.
Thailand unveiled this week a pilot program that permits foreign visitors to make payments using cryptocurrency in Phuket, a renowned tourist destination. This initiative seeks to provide an alternative payment option and integrate digital currencies into the country’s payment system.
Finally, the UK Treasury has clarified the regulatory status of cryptocurrency staking by explicitly excluding it from the definition of a “collective investment scheme". This move provides the sector with much-needed regulatory clarity.
In the UK, a collective investment scheme is an arrangement in which participants are entitled to profit or income generated through it. These include investment funds and ETFs, which are heavily regulated by the Financial Conduct Authority (FCA).
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
