Investing.com-- Bitcoin price slipped on Wednesday, extending a recent downturn as fears over mass token sales by the U.S. government largely offset some optimism over friendlier crypto regulations in the country.
Bitcoin fell 0.7% in the past 24 hours to $66,352.0 by 09:11 ET (13:11 GMT). Positive comments from Republican presidential candidate Donald Trump saw the token rally as high as $70,000 over the weekend, before the token swiftly reversed course.
Appetite for risk-driven assets was also undermined by anticipation of a Federal Reserve interest rate decision, as well as a potential escalation in Middle East tensions after reports said Hamas chief Ismail Haniyeh was killed by an Israeli strike in Tehran.
Specter of US government sales dents Bitcoin
Pressure on the world’s biggest cryptocurrency came chiefly from speculation over potential token sales by the U.S. government, which reportedly holds about $12 billion worth of tokens and is among the biggest Bitcoin holders in the world.
Media reports said wallets associated with the government had moved $2 billion worth of Bitcoin seized from online black market Silk Road, onto what could potentially be a custody service.
But a token movement of that magnitude usually heralds a sale, as seen with distributions by defunct crypto exchange Mt Gox earlier this month.
Distributions by Mt Gox had battered Bitcoin all the way down to $54,000, although the token did recover on the prospect of friendlier crypto regulations.
Trump reiterated his support for the crypto industry during an address at the Bitcoin Convention in Nashville over the weekend. A slew of figureheads in the crypto industry were seen either donating to entities associated with Trump’s campaign, or expressing outright support for his presidency.
Crypto price today: altcoins muted, XRP outperforms on SEC speculation
Among broader crypto markets, most altcoins moved in a flat-to-low range, as sentiment towards crypto remained largely quashed.
But XRP was an exception, climbing 3.6% amid unfounded rumors that the Securities and Exchange Commission was close to dropping its lawsuit against Ripple, the firm that issues XRP.
Broader altcoins moved in a flat-to-low range. World no.2 token Ether fell 1.2% to $3,318.64 an ounce, while SOL and ADA slid 0.2% and 0.4%, respectively.
Among meme tokens, DOGE fell 2.2%, while SHIB lost 1.3%.
Terra blockchain pauses operations after $4M token theft due to exploit
In other developments in the crypto realm, Terra developers temporarily halted network operations on Wednesday following a reentrancy attack that resulted in over $4 million worth of various tokens being stolen from the blockchain.
The network was paused at block height 11430400 to implement an emergency patch to fix the vulnerability, which was completed at 04:19 UTC. Validators, who possess over 67% of the voting power on Terra, upgraded their nodes to prevent future exploits, according to a post on X.
Security firm Beosin estimated that the attack led to the theft of $3.5 million in USDC stablecoin, $500,000 in Tether stablecoin, 2.7 bitcoin (BTC), and more than 60 million of Astroport’s ASTRO tokens.
“The attacker exploited a reentrancy vulnerability in the timeout callback of ibc-hooks. The vulnerability was disclosed in April this year," Beosin noted.
Investing.com Terra Classic Index (LUNC) token fell 2.8% in the past 24 hours, while ASTRO lost 52%.