[ad_1]
Amidst waves of concern surrounding the sale of Bitcoin by the US and German governments, industry experts have come forward to dispel fears, suggesting that these moves could be bullish for the market.
Yesterday, the Bitcoin sector experienced heightened volatility following actions by two major governments. The German Federal Criminal Police (BKA) continued with its sales of Bitcoin, reducing its holdings from 50,000 BTC to 45,264 BTC. Concurrently, the US government transferred 4,000 BTC to Coinbase, likely aiming for liquidation, retaining a substantial 213,546 BTC in its reserves.
Why This Is Bullish For Bitcoin (Long-Term)
Travis Kling, founder of Ikigai Asset Management, remarked on the synchronicity of these events. “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.
Related Reading
Despite concerns that these sales could pressure Bitcoin prices, experts argue that the impact on the market is likely minimal. Ki Young Ju, CEO of CryptoQuant, countered the prevalent fear, uncertainty, and doubt (FUD). He noted, “US gov’t sold 4K Bitcoin today, but it’s less likely to impact the market. Coinbase Prime handled 20-49K BTC in sell-side liquidity daily during high spot ETF inflows and 6-15K daily during low spot ETF inflows. Posting this because I’m tired of ‘gov’t selling’ FUDs,” as shared via X.
Crypto analyst Skew (@52kskew) provided insights into how these transactions typically occur, “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 explanation makes it clear that the impact on the price is likely to be rather small.
Adam Cochran, managing partner at CEHV, highlighted the resilience of Bitcoin in light of multiple 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.”
Will Gold’s History Repeat Itself For BTC?
Echoing a historically bullish sentiment, Alistar Milne, CIO of Altana Digital, drew parallels to past government sales of assets, “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.”
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 pic.twitter.com/i0rZMpuiS0
— Alistair Milne (@alistairmilne) June 26, 2024
For context, during his tenure as Chancellor of the Exchequer from 1997 to 2007, Gordon Brown made the decision to sell approximately 60% of the UK’s gold reserves between 1999 and 2002, a period known as the “Brown Bottom.”
Related Reading
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. This action is widely regarded as a financial misstep that cost the UK treasury billions in potential revenue, as gold prices surged to over $1,500 per ounce in the following decades.
Moreover, there’s another bullish aspect to this. The finalization of these BTC sales could remove a significant overhang on the market as these sales are hanging above the market like a Damocles sword; once done, there’s a major downside risk for the market forever eliminated, better early than late.
At press time, BTC traded at $61,117.
Featured image created with DALL·E, chart from TradingView.com
[ad_2]
Source link
