Amid 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 increased 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. At the same time, the US government transferred 4,000 BTC to Coinbase, likely with an eye toward 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, commented on the synchronicity of these events. “All at the same time – US government selling seized Silk Road Bitcoin, US government selling seized Banmeet Singh BTC, German government 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 sort of underlying coordination/intention,” Kling stated through X.
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Despite concerns that these sell-offs could pressure Bitcoin prices, experts argue that the impact on the market is likely minimal. Ki Young Ju, CEO of CryptoQuant, countered the prevailing fear, uncertainty, and doubt (FUD). He noted: “The US government did not sell 4K Bitcoin today, but it is less likely to impact the market. Coinbase Prime moved 20-49K BTC in sell-side liquidity daily during the rally.” one-off ETF inflows and 6-15K daily during low spot ETF inflows. Posting this because I’m tired of ‘not selling’ FUDs,” as shared via X.
Crypto Analyst Skew (@52kskew) offered Insights into how these transactions typically occur, “The U.S. government sent 3.94K BTC to Coinbase Prime to be managed by Coinbase Institutional. There are typically two options here: Counter counters can auction BTC to customers (buyers outside the market) or an open market auction (sold over time in the market). Skew’s explanation makes it clear that the impact on price is likely to be quite small.
Adam Cochran, Managing Partner of CEHV, highlighted Bitcoin’s resilience in light of multiple bearish catalysts, “Also with the US Gov FUD, Mt Gox FUD, most major airdrops completed, bear markets, Nvidia on the rise, BTC had every reason to fall and still is mostly kept at US$60 thousand. Negative news struggling to make an impact.”
Will gold history repeat itself for BTC?
Echoing a historically optimistic sentiment, Alistar Milne, CIO at Altana Digital, drew parallels with previous government asset sales: “Government sales are bullish. Gordon Brown famously sold out the U.K. Gold reserves for less than $300/oz. One of the worst decisions made by a Chancellor of the Exchequer ever. Germany and America are making much worse mistakes when selling seized BTC now. They can only sell once.”
Government sales are optimistic
Gordon Brown sold UK gold reserves for less than $300/oz. One of the worst decisions made by a Chancellor of the Exchequer, ever
Germany and America are making much worse mistakes by selling seized BTC now. They can only sell it 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”.
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Sales were held in a series of auctions at prices ranging between $256 and $296 per ounce – significantly below the price of gold in subsequent years, which saw a substantial increase. This action is widely regarded as a financial misstep that cost the UK Treasury billions in potential revenue as gold prices rose to more than $1,500 per ounce in the following decades.
Furthermore, there is another optimistic aspect to this. The completion of these BTC sales could remove a significant overhang in the market, as these sales are hovering above the market like a sword of Damocles; once this is done, there is a huge downside risk to the market eliminated for good, better sooner than later.
At press time, BTC traded at $61,117.
![Fears of Bitcoin Sales by US and German Governments Are FUD: Experts 1 Bitcoin price](https://thegurumedia.com/wp-content/uploads/2024/06/BTCUSD_2024-06-27_13-07-08.png)
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