Bitcoin [BTC] FUD takes center stage as Uncle Sam makes a move

• Bitcoin holdings confiscated by the US government began to move, causing FUD
• Short-term holders declined while long-term holders stayed

In recent years, the US government has accumulated massive amounts of BTC for law enforcement purposes. This BTC remained dormant for most of the time it was held by the US government. However, according to new data from Glassnode, this BTC has now started to move.

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The amount of Bitcoin in motion is estimated to be around 40,000 BTC. From the above volume, 9,861 BTCs were seized by the Silk Road hacker and sent to a Coinbase cluster.

Source: glass node

The FUD begins

This behavior by the US government has led many members of the crypto community to speculate about what this could mean for Bitcoin. Many users assume that the US government will sell these BTC holdings, which will negatively affect the value of the cryptocurrency.

Additionally, this government move may affect sentiment around BTC and cause more FUD.

At press time, the overall weighted sentiment towards Bitcoin is slightly positive. However, if FUD continues to spread, things could take a turn for the worse and selling pressure on BTC holders would end up increasing.

Source: Santiment

Even though FUD around Bitcoin is on the rise, long-term holders are less likely to be affected. From the declining long/short ratio, it can be observed that short-term holders of BTC have started exiting their positions. The MVRV ratio for the remaining long-term holders is negative, meaning they would not be able to profitably sell their holdings during this period.

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As such, these long-term holders are more likely to continue to hold onto their assets until selling their holdings is profitable. The declining speed is also a sign that the majority of BTC addresses have been HODLing.

Source: Santiment

Any positive, hopeful signs?

However, one of the reasons addresses might be optimistic about Bitcoin’s future would be its performance relative to other real-world assets. For example, according to analysts, Bitcoin has managed to outperform assets such as gold, silver, US stocks and the US Dollar Index.

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It remains to be seen whether Bitcoin will continue on its course to outperform various asset classes and whether BTC holders will be affected by the FUD.

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