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Bitcoin Plunging Lower Despite BTC Reserve Hype
Despite the recent hype surrounding the U.S. government’s creation of a $50 billion Bitcoin reserve, the cryptocurrency market is experiencing a significant downturn. According to data from analytics platform Lookonchain, the U.S. government has already sold $16.14 billion worth of Bitcoin prematurely.
The sharp price drop is not unexpected, as many had predicted that the news would trigger a “sell-the-news” event. This phenomenon occurs when traders rush to sell their holdings in anticipation of a decline in value following a significant announcement or event.
In an interview with Cointelegraph, Bitwise CEO Hunter Horsley recalled a similar scenario playing out in early 2024, when the launch of Bitcoin ETFs led to a brief correction before prices rebounded. The current market dynamics may follow a similar path, with investors taking profits and then re-entering the market as sentiment improves.
On a more positive note, some experts believe that the creation of a government-backed Bitcoin reserve could have long-term implications for the cryptocurrency’s adoption and legitimacy. According to Bitwise CIO Matt Hougan, this development significantly reduces the likelihood of governments banning Bitcoin in the future. This may prompt other countries to follow suit and establish their own reserves, further increasing the asset’s institutional appeal.
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Source: https://u.today/bitcoin-plunging-lower-despite-btc-reserve-hype
