In a notable move that has caught the attention of the crypto community, the U.S. government transferred a massive Ethereum (ETH) reserve on Monday, July 1. The transfer has sparked speculations around a potential ETH selloff, which could mirror the downtrend Bitcoin (BTC) suffered amid selloffs by German and U.S. governments. Moreover, the anticipated launch of Spot Ethereum ETFs this month further fuels such concerns.
U.S. Government Shifts Ethereum Reserve
According to Arkham Intelligence, the U.S. government recently transferred 3,375 Ethereum. This reserve, valued at approximately $11.75 million, was shifted to an unidentified address on Monday. The transfer’s timing is particularly significant as it comes ahead of anticipated approval of Spot Ether ETF S-1 filings.
Last week, the U.S. Securities and Exchange Commission (SEC) returned these filings to major applicants including BlackRock, Fidelity, and VanEck. Hence, analysts predict that applicants could submit further S-1 amendments this week. Meanwhile, they have offered a potential approval date for mid-July.
The movement of such a substantial amount of Ethereum before these key events has led to concerns that the U.S. government might be preparing to capitalize on the Ethereum ETF S-1 approval news. In case the government sells its Ethereum holdings, it could adversely influence the ETH price just like it did for Bitcoin.
The transferred funds are linked to the U.S. government’s seized assets from Estonian crypto entrepreneurs Sergei Potapenko and Ivan Turogin. Potapenko and Turogin were deceived investors through promises of high returns from their crypto mining operations. The fraudulent activities led to confiscation of significant crypto assets by authorities, including the Ethereum that was moved.
This Ethereum transfer follows a similar pattern observed last week when the U.S. government moved 4,000 Bitcoin to exchanges in June. The repeated movements of seized crypto assets have led to market speculation about imminent dumps, particularly in light of the upcoming Ethereum ETF decision.
Currently, the U.S. government holds 50.524K Ethereum worth a staggering $175.46 million. Meanwhile, the Ethereum price just recovered above $3,400 but the trend may be impacted by the latest transfer.
Also Read: ETH Price Surges 5% Amid Increased Whale Activity Ahead of Ethereum ETF Approval
Bitcoin Dump Concerns
The June BTC transfer by the U.S. government caused widespread fear, uncertainty, and doubt (FUD) in the market. In addition, on Friday, June 28, a notable transfer of 11.84 BTC was also recorded from the same government-held wallet.
As of yet, the U.S. government holds 213.534K Bitcoin, valued at a whopping $13.41 billion. With speculations of an impending selloff due to the BTC transaction last Friday, analysts have hinted at increased FUD in the market. Moreover, the German government’s BTC selloffs have added to bearish sentiment in the market and among investors.
In the latest update, the German Government shifted 400 BTC to exchanges including Coinbase, Bitstamp and Kraken. The Bitcoin shifted is worth about $25.28 million. This again hints at an impending selloff by the German government just after the Bitcoin price rebounded above $63,000.
Moreover, in last two weeks, the German Government-associated address has transferred over 2,700 BTC to crypto exchanges. Hence, market participants worry about a potential drop in the Bitcoin price. Moreover, the July rebound expectations are in jeopardy.
Also Read: Ethereum Network to Get Major Boost With SSF Roadmap, Says Vitalik Buterin
