The German government has depleted most of its bitcoin holdings after abitcoin-news/bitcoin-crash-weak-hands-loss-taking-2022-lows/” rel=”nofollow noopener” target=”_blank”>extended sales periodfs cryptocurrency that left cryptocurrency investors reeling under selling pressure. The origin of these assets dates back to 2013 through the profits from the operations of a now-defunct movie content piracy website called Movie2K. In mid-January 2024, reports emerged that the Saxon State Criminal Police Office seized 50,000 btc from one of the website’s operators as part of criminal investigations targeting Movie2K.
At the time Movie2K began operations in 2013, these assets were collectively worth less than $50 million. However, bitcoin has appreciated greatly since then and the value of the reserves had grown to over $2.5 billion before the seizure in January 2024. Liquidations began in June 19, but intensified in July. Notably, on-chain data shows that the sell-off has seen over 40,000 btc of stock depleted in the past month, with less than 5,000 btc now remaining.
Liquidations in Germany could end soon
Numerous news reports and prominent voices in the cryptocurrency market have pointed to the German government as the culprit behind the sell-off. However, a small German state called Saxony is responsible for billions of dollars worth of bitcoin sales. Nonetheless, the sell-offs certainly surprised many investors and contributed greatly to straining the price of bitcoin in recent weeks. This, in turn, caused a chain reaction across the market, with many altcoins seeing their values drop in unison with bitcoin.
According to on-chain data from Arkham Intelligence, liquidations could end soon, which could provide the market with some much-needed breathing room. Notably, the most recent transfer involved the transfer of 2,700 btc worth $154.56 million just two hours ago to Coinbase, Bitstamp, Kraken, 139Po (likely an institutional/OTC escrow service), and the bc1qu address.
So far, they have transferred 14,178 btc to market makers and exchanges. in the last 24 hoursbringing its total sales to over 43,000 btc. At the time of writing, the state government controls 6,894 btc worth $394.43 million. Since most of the assets have already been sold out, the sell-off should have a minor effect on selling pressure going forward.
What's next for bitcoin?
bitcoin is currently trading at $57,195 and is up 5.73% over a seven-day period. While 43,000 btc is not an insignificant figure, the market has actually been bitcoin-news/is-a-bitcoin-breakout-looming-options-markets-signal-imminent-volatility-surge/” rel=”nofollow noopener” target=”_blank”>Handling it pretty well As of now, bitcoin's total market cap stands at trillions of dollars, so the recent sell-off is just a drop in the digital ocean of bitcoin. This school of thought was recently reaffirmed By Ki Young Ju, Founder and CEO of CryptoQuant. He believes that the sell-off has led to an overreaction from cryptocurrency investors.
On the other hand, the country of El Salvador has been taking advantage of the sales to increase its bitcoin holdings.
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While Germany sells its twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoinEl Salvador buys more bitcoin every day image.twitter.com/XKnscuxwBA
— bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1811508713619939719?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>July 11, 2024
Featured image created with Dall.E, chart from Tradingview.com
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