Bitcoin Dips 3% Amid $40M Government Wallet Theft Fallout

Bitcoin (BTC) experienced a sharp decline of 3.2% over the past 24 hours as of January 25, 2026, dropping from $68,500 to $66,300. This downturn coincides with breaking news of a $40 million theft from a U.S. government wallet, allegedly linked to a cybercriminal known as 'Lick,' who may be connected to a government-contracted firm for seized crypto disposal. The market reaction underscores growing concerns over security in government-held digital assets. For the latest updates on such incidents, check Crypto News.

Price Action Details

Bitcoin's current price stands at $66,300, reflecting a 3.2% drop in 24 hours, a 5.1% decline over 7 days, and a 2.8% decrease over the past 30 days. Key support levels are at $65,000, with resistance near $68,000, based on recent trading patterns. Trading volume spiked to $38 billion in the last 24 hours, 22% above the 7-day average of $31 billion, signaling heightened market activity. This has shaved off approximately $42 billion from BTC’s market cap, now at $1.31 trillion, according to data from CoinGecko.

Driving Factors

The $40 million theft from a government wallet, reported by on-chain sleuth ZachXBT, appears to be a primary catalyst for Bitcoin’s price drop. ZachXBT alleges that the hacker 'Lick' is the son of the president of a firm tasked with managing seized crypto assets for the U.S. government. On-chain data shows the stolen funds, equivalent to roughly 600 BTC at current prices, were moved through multiple mixer services within hours of the breach on January 24, 2026. This incident, detailed further at CoinMarketCap, has reignited fears of insider threats in crypto custody.

Broader Market Context

Bitcoin’s 3.2% decline outpaces Ethereum (ETH), which fell 2.1% to $2,450 in the same 24-hour period, suggesting BTC-specific selling pressure. Sector-wide, DeFi total value locked (TVL) remains stable at $92 billion, though trading volumes on major protocols dipped by 4% week-over-week, per DefiLlama. The Crypto Fear & Greed Index dropped to 41 (Neutral) from 48 a day prior, indicating a cautious market sentiment. Analyst firm Glassnode noted that government-related security breaches, like this $40 million theft, historically trigger short-term bearish trends, as covered in Governance News.