Industry experts are attempting to calm fears surrounding the recent sale of Bitcoins by US and German government officials. They suggest that this move could have a positive impact on the Bitcoin market.
The Bitcoin market experienced increased volatility yesterday as a result of two government actions. German Federal Criminal Police BKA continued with its sales It has reduced its Bitcoin reserves from 50,000 BTC down to 45,264 BTC. The US government also transferred 4,000 BTCs to Coinbase in a bid for liquidation. It still has a large amount of 213,546 BTCs.
Why this is bullish for Bitcoin in the Long-Term
Travis Kling of Ikigai Asset Management commented on this synchronicity. “All at the same time—US Govt selling seized Silk Road Bitcoin, US Govt selling seized Banmeet Singh BTC, German Govt selling seized Movie2k BTC, Mt Gox distributing BTC after a decade. Interesting… I can’t help but look at all these actions and wonder about some kind of coordination/underlying intention,” Kling stated Via X.
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Experts argue that this impact is minimal, despite concerns about the potential for these sales to pressure Bitcoin’s price. Ki Young Ju (CEO of CryptoQuant) countered fear, uncertainty and suspicion. Despite the fact that US government only sold 4,000 Bitcoins, it is unlikely to affect the markets. Coinbase Prime managed 20-49K BTC daily in sell-side liquid during high-traffic times. spot ETF inflows You can expect to receive between 6-15k daily when ETF inflows are low. Posting this because I’m tired of ‘gov’t selling’ FUDs,” as shared via X.
Crypto analyst, Skew provided These transactions can be viewed as a typical example of how they are conducted. “US Gov sent 3.94K BTC to Coinbase Prime to be handled by Coinbase Institutional. There’s typically two options here: OTC desks can auction off the BTC to clients (off-market buyers), or an open market auction (sold over time on the market).” Skew’s reasoning makes it very clear that any impact on price will be small.
Adam Cochran, managing partner at CEHV, highlighted Bitcoin’s resilience in the face of several bearish catalysts “Also with US Gov FUD, Mt Gox FUD, most major airdrops finished, markets down, Nvidia off highs, BTC has had every reason to go lower, and it’s still mostly held $60k. Negative news struggling to make a dent.”
What will gold’s past repeat itself for BTC?
Alistar Milne of Altana Digital echoed the bullishness of past asset sales by governments. “Government selling is bullish. Gordon Brown famously sold the UK’s Gold reserves for less than $300/ounce. One of the worst decisions made by a Chancellor of the Exchequer, ever. Germany & America are making far worse mistakes by selling seized BTC now. They can only sell once.”
The government is encouraging the sale of goods
Gordon Brown is famous for selling the UK Gold Reserves at less than 300/ounce. The worst decision ever taken by a Chancellor.
Germany & America are making far worse mistakes by selling seized BTC now. The only time they can sell is once pic.twitter.com/i0rZMpuiS0
— Alistair Milne (@alistairmilne) June 26, 2024
Gordon Brown sold 60% of UK’s Gold Reserves between 1999-2002, also known as The “Golden Age”. “Brown Bottom.”
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The sales were conducted in a series of auctions at prices that ranged between $256 and $296 per ounce—significantly below the gold price in subsequent years, which saw a substantial rise. The action has been widely condemned as being a financial Mistake that resulted in the UK Treasury losing billions of dollars in revenue as the gold price soared over $1500 an ounce.
This has another aspect that is bullish. This could be a good thing for the markets as the BTC sales will remove the overhang.
BTC was trading at $61,117 as of the time this article went to press.
Featured image created with DALL·E, chart from TradingView.com
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Source: www.newsbtc.com