With crypto prices dropping, investor confidence is taking a big hit. The FBI crypto news is one catalyst for falling Bitcoin (CCC:BTC-USD) prices, but there are a number of other factors that are hurting the market today.
You might think it’d be good news, the retaking of Bitcoin from the DarkSide hackers who attacked Colonial Pipeline. However, it seems the news is actually worrying investors.
The Department of Justice announced on Monday that officials seized $2.3 million worth of Bitcoin, which Colonial paid as ransom to DarkSide. Deputy Attorney General Lisa Monaco summed up the DOJ’s satisfaction with the operation, saying, “today’s announcement demonstrates that the United States will use all available tools to make these attacks more costly and less profitable for criminal enterprises.”
Investors are not seeing eye to eye with investigators. Many believe the ease of recovery to be a damaging testament to Bitcoin’s privacy. Users think the speedy retaking of the ransom undermines Bitcoin’s privacy standards. Investors are making their thoughts known on Twitter:
Investors spooked after key crime use case is undermined by the feds.
"Bitcoin slides 7% after U.S. seizes most of Colonial Pipeline ransom"https://t.co/3ZLXAetnMe
— David Schatsky (@dschatsky) June 8, 2021
Others are looking further into the incident, airing more conspiratorial ideas around the event and the reason for Bitcoin’s decline.
The FBI Crypto News Isn’t the Only Reason for Crypto Prices Dropping
Regardless of the logistics or the theories behind the government’s ransom recovery, there are other factors dragging down Bitcoin today. In a response to the attack, President Joe Biden is making clear his intentions to bring crypto to the top of the agenda at this weekend’s G-7 Summit.
Biden hopes to set a worldwide agenda for responding to the increasingly popular ransomware attacks involving cryptocurrency. Seeing how potential SEC regulations dragged down BTC prices late last month, we can assume the downturn today is partly fueled by the news. It certainly isn’t helping that speculation is pointing to China’s crypto regulations as pressure on the U.S. to actually implement these proposed policies.
It appears that Bitcoin is suffering also from a decreasing number of transactions. CoinTelegraph reported this morning that on-chain BTC transactions are reaching a 3-year low. This coincides with a $300 billion loss of value for the entire asset class. All together, the series of unfortunate events is really hitting Bitcoin prices. Support is reaching as low as $27,000, lower than where BTC began the year.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.