Governments Selling Bitcoin Is Nothing But Plain FUD, Here’s Why

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As a researcher with experience in the cryptocurrency market, I believe that the recent selling of Bitcoins by both the U.S. and German governments is not the primary cause of the current market correction. CryptoQuant’s CEO, Ki Young Ju, has made a compelling case that these large transactions are within the capacity of exchanges like Coinbase Prime to handle and should not be causing undue panic among market participants.

As an analyst, I’ve noticed an intriguing trend over the past week: the German government has been actively selling off their Bitcoin holdings via well-known exchanges such as Coinbase and Kraken. On June 26, the US government followed suit, transferring a significant amount of 4,000 Bitcoins to Coinbase Prime. Consequently, the Bitcoin price dipped by approximately 1.5%, falling below the $61,000 mark. However, according to CryptoQuant’s CEO, this mass selling by governments should be disregarded as mere Fear, Uncertainty and Doubt (FUD) and not the primary cause for the recent BTC price decline.

U.S. Government’s Bitcoin Sale Unlikely to Impact Market

Regarding the recent Bitcoin sell-off by the US government as expressed by CryptoQuant CEO Ki Young Ju, it’s his belief that this transaction, representing around 4,000 Bitcoins, is unlikely to significantly influence the cryptocurrency market.

The executive added that Coinbase Prime is capable of managing significant Bitcoin transactions, ranging from 20,000 to 49,000 Bitcoins, during times when large inflows occur into the spot Bitcoin ETFs. Conversely, even in the absence of substantial Bitcoin ETF inflows, Coinbase Prime still manages liquidity at a level between 6,000 and 15,000 Bitcoins.

As a researcher, I’d like to share my perspective on the ongoing discussion about “government selling” in the market. I understand the concerns raised by some participants, but I believe it’s important to put things into context. In my opinion, the sale itself shouldn’t be cause for undue alarm.

US gov’t sold 4K #Bitcoin today, but less likely to impact the market.

During periods of high Exchange-Traded Fund (ETF) inflows, Coinbase Prime managed between 20,000 to 49,000 Bitcoins in daily sell-side liquidity. Conversely, during times of low ETF inflows, the figure dropped to a range of 6,000 to 15,000 Bitcoins.

Posting this because I’m tired of “gov’t selling” FUDs.

— Ki Young Ju (@ki_young_ju) June 26, 2024

I analyzed the transaction records earlier this year and noted that in April, I observed a significant transfer of digital assets from the U.S. government’s account. Specifically, they moved 30,175 Bitcoins worth approximately $2 billion into a single wallet on Coinbase.

As an analyst, I’ve noticed that Germany’s Bitcoin transactions resemble those of the U.S. government over the past week, as they have transferred approximately 2,200 Bitcoins. However, these sales have not diminished the significant growth in Germany’s Bitcoin holdings. The current value stands at around $2.76 billion, with a substantial unrealized profit of approximately $1.1 billion.

What’s Causing the BTC Price Correction

The significant drop in Bitcoin’s (BTC) price can primarily be attributed to miners selling off their coins en masse. This seller’s market behavior stems from the financial strain experienced by miners following the recent halving event, making it challenging for them to sustain their operations. Consequently, these distressed miners have been offloading their Bitcoin holdings, intensifying downward price pressure on the cryptocurrency.

At present, Bitcoin’s price stands at a 1.5% decrease to $60,630. The total value of this cryptocurrency in circulation is currently below the $1.2 trillion mark. Over the past week, Bitcoin has experienced a significant loss of over $100 billion in market capitalization.

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2024-06-27 09:41