As a researcher with a background in financial markets and experience following the cryptocurrency space closely, I believe that the recent sales of Bitcoin by government entities and the potential distribution of coins from the Mt.Gox estate have had a significant impact on the price of Bitcoin. The sales represent a large supply of Bitcoin entering the market at a time when demand may be thin, leading to downward pressure on prices.
VanEck, a leading investment asset management company, recommends implementing a Dollar Cost Averaging (DCA) approach when it comes to purchasing Bitcoin (BTC), particularly in the run-up to the US November elections.
Mt.Gox, US And German Government Offloading Bitcoin
Matthew Sigel, VanEck’s Head of Digital Assets Research, acknowledged the recent Bitcoin sell-offs by the U.S. and German governments and Mt.Gox. He emphasized their significant influence on Bitcoin’s price and shared further insights in a letter to clients. The letter delved deeper into the specifics of these Bitcoin sales.
As an analyst, I’d rephrase it as follows:
It’s important to mention that Bitcoin has been traded for approximately $10 billion daily on cryptocurrency exchanges throughout this year. However, this amount does not account for the transactions conducted Over-the-counter (OTC). Furthermore, there are reports of the German government selling up to 8,000 Bitcoins from the seized stash of 50,000 BTC obtained from pirated movie site operators in early January, 2024.
Sigel noted that the Bitcoin exchange’s current balance stands at approximately 37,000 coins. In contrast, the U.S. government owns roughly 213,297 Bitcoins following its $240 million transfer to Coinbase Prime.
“In Sigel’s opinion, the subpar market performance might be attributed to deliberate government sell-offs during the lightly traded July 4th week, with further selling possibilities looming.”
Trump to Launch US Bitcoin Reserve
It’s anticipated that the forthcoming elections could lead Bitcoin to reach a new peak price (ATH) once again.
With Donald Trump, the Republican presidential nominee, disclosing his intention to establish a Bitcoin reserve for the US if elected, VanEck promotes a Dollar Cost Average (DCA) approach to enable investors to purchase Bitcoin up to a predetermined percentage.
As an analyst, I would rephrase it as follows: Lately, Bitcoin has experienced a downturn in its performance, primarily due to sell-offs by governments such as the US and Germany, along with growing apprehensions surrounding potential large-scale distributions from the Mt. Gox estate. To our clients, we communicated this analysis.
The Mt Gox trustee currently holds ~$8B of bitcoins. They have recently…
— matthew sigel, recovering CFA (@matthew_sigel) July 8, 2024
In most 60/40 portfolio configurations following a benchmark, the company considers allocating 6% of the total investment to both Bitcoin and Ethereum as a reasonable proportion.
During the upcoming election, Trump’s advocacy for digital assets and cryptocurrency businesses could potentially provide him with an edge. On the other hand, Joe Biden remains steadfast in his opposition to Trump, refusing to back down until he secures victory. This intriguing dynamic is being closely monitored by market investors.
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2024-07-08 19:40