The bull market in the crypto space will have unexpected participants, with the U.S. transferring $920 million in Bitcoin?

The U.S. made a "bizarre" move by transferring 15,118 bitcoins

In the past week, Bitcoin (BTC) has risen from $51,728 to a historical second high of $64,000, an astonishing surge that defied many analysts' expectations. As the cryptocurrency market continues to heat up, Wall Street giants have begun to act on the scent of a bull market, while the U.S. government made a "bizarre" move before Bitcoin's big rally.

On-chain data shows that around 1:39 PM Eastern Time yesterday (approximately 0:39 AM Beijing Time), just before the Bitcoin price soared past $64,000, a wallet holding seized U.S. government funds transferred 1 Bitcoin. Less than half an hour later, the remaining 2,817 BTC in that wallet were also transferred, with a total value of approximately $173 million.

Subsequently, another wallet, containing about 12,300 BTC, first transferred 0.01 BTC to an unknown address, and then the rest of the Bitcoin was also transferred out, valued at approximately $750 million. Ultimately, the total value of Bitcoin transferred from these two wallets was about $923 million, and the funds in these wallets were seized from hackers who attacked Bitfinex in 2016.

Since the U.S. government is currently one of the world's largest Bitcoin whales, how the authorities handle these Bitcoins has caused concern among many investors. This sudden transfer of BTC by the U.S. government is seen by many as a signal of preparing to crash the market. Whether the sharp decline in Bitcoin after reaching $64,000 is related to this remains unknown. However, the U.S. Department of Justice stated that transferring nearly $1 billion in Bitcoin seized from Bitfinex hackers was for legitimate law enforcement purposes.

The market is curious about the main factors driving this sudden surge in Bitcoin prices. James Butterfill, the research director at CoinShares, stated: In the past, the trend of Bitcoin prices was closely related to expectations of interest rate cuts. However, with the listing of the U.S. Bitcoin spot ETF, the price trend of Bitcoin has significantly diverged, greatly affecting Bitcoin's recent price movement.

The funds in BTC ETFs have surged, while only about 900 bitcoins can be produced each day

Currently, Bitcoin produces only about 900 coins daily, but the newly launched U.S. ETFs require approximately 2,800 bitcoins daily (meaning the demand for Bitcoin exceeds supply by three times). This has resulted in a 28% reduction in Bitcoin reserves on exchanges since 2020, highlighting a significant demand-side shock in the Bitcoin market.

Despite the U.S. government's ambiguous stance on Bitcoin, the Bitcoin spot ETF market, driven by BlackRock, Fidelity, and other major banks, continues to gain momentum and has quickly become the second largest single commodity ETF in the U.S. market.

Bloomberg analyst James Seyffart tweeted that there are now four U.S. Bitcoin spot ETFs with assets under management exceeding $2 billion, namely Grayscale's GBTC, BlackRock's IBIT, Fidelity's FBTC, and Ark 21Shares' ARKB.

It's worth mentioning that BlackRock recently held a private event for their top clients and industry participants, where several exciting messages were shared. Senior executives at BlackRock stated, "We've received many calls, even from people we never thought would call us. This bull market may bring many unexpected participants."

Edward Snowden, the whistleblower of the "Prism" incident and former U.S. defense contractor who fled the country, also released a significant signal yesterday. He wrote on X: "Predicting that this year, a sovereign nation will be exposed for buying Bitcoin to replace gold reserves, but has not disclosed this fact publicly."

However, during this round of Bitcoin rising above $60,000, retail investor participation has been low. Analysts said, "Although the Bitcoin price trend is unbelievable, current data shows that retail is calm. This indicates that institutional investors may dominate this phase, with ETFs viewed as potential accumulation tools."

With the BTC production halving in April, bitcoin will become even scarcer

As capital continues to pour in, the top cryptocurrency's rally continues, also triggering investors' fear of missing out. Investors are looking forward to Bitcoin potentially breaking through its historical high of $69,000. Investors are waiting for the mining reward "halving" expected to occur in April, a situation that has historically been beneficial to Bitcoin prices. Additionally, the prospect of the Federal Reserve possibly cutting interest rates this year has stimulated investor interest in higher-yield or more volatile assets.

With Bitcoin prices soaring, the cryptocurrency market is experiencing a bull market unlike any before. This bull market may attract many unexpected sovereign nations and institutions, while the rise of Bitcoin spot ETFs will be an important milestone in the evolution of cryptocurrencies, providing more investors with the opportunity to participate in the cryptocurrency market.