The German government has sold over half its holding, now worth over US$1.3B.
Many have criticized the government for this action, including a German MP.
Bitcoin’s price fell to as low as US$55k before experiencing a slight recovery.
The German government has transferred over US$900 million (AU$1,336 million) worth of Bitcoin from its stash.
According to data from blockchain analytics platform Arkham, German government-owned Bitcoin wallets moved approximately 16,309 BTC in several batches to external addresses, including crypto exchanges Bitstamp, Kraken, Coinbase, and market makers Flow Traders and Cumberland DRW.
An additional 700 BTC, valued at over US$38.5M (AU$57M), was transferred to an unknown wallet, “139Po.” This particular address has received significant amounts of Bitcoin from the German government. Recent transfers include 550 BTC on July 2, 500 BTC on June 25, and 800 BTC on June 20.
This marks the German government’s largest single-day BTC sell-off. The move caught the attention of not just the crypto community but also German politicians. Joana Cotar, a member of the German Bundestag, thinks the government should hold the seized BTC instead of selling it.
Related: JP Morgan Suggests March 2024 as Possible Peak of Current Bull Market
Bitcoin Takes a Hit, Manages To Recover
Shortly after the sell-off, Bitcoin’s price dropped more than 3% to a low of US$55,139 (AU$ 81,778.86). The price drop came after the final batch of transactions was completed, which totalled 8,700 BTC.
Data from Coinglass shows that Bitcoin’s sudden drop caused an avalanche of liquidations across the market. The total liquidations came in at nearly US$300M (AU$445M), most of which were long positions.
BTC rebounded slightly above US$57,000 (AU$84,614), marking a 4.2% recovery over the past 24 hours.
With the latest transfers, the German government has passed the halfway point in its selling spree, reducing its holdings from 50,000 BTC to 23,788 BTC worth US$1.3B (AU$1.92B) since it began offloading BTC last month, according to Arkham data.
Related: Mt. Gox Conducts Test Transactions: Is Another Bitcoin Dump Looming?
This price action followed last week’s slide to the lowest level since February. There are several factors attributed to the drop. Besides the German and US governments selling seized assets and the defunct crypto exchange Mt. Gox issuing repayments, a lot of pressure entered the market as spot Bitcoin ETFs recorded massive net outflows in June.
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