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Amid waves of concern surrounding the sale of Bitcoin by the US and German governments, industry experts have stepped forward to dispel concerns, suggesting these moves could be bullish for the market.
The Bitcoin sector saw increased volatility yesterday following actions taken by two major governments. The German Federal Criminal Police (BKA) announced continued 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 for liquidation, while keeping a significant amount of 213,546 BTC in its reserves.
Why This Is Bullish for Bitcoin (Long Term)
Travis Kling, founder of Ikigai Asset Management, said of the coincidence of these events. “At the same time, the US government sold Silk Road Bitcoin, the US government sold Panmit Singh Bitcoin, the German government sold Movie2K Bitcoin, and Mt. Gox distributed Bitcoin a decade later. It’s interesting… I can’t help but look at all of these actions and wonder what kind of coordination/intent is behind them.” advertiser via X.
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Despite concerns that these sales could pressure Bitcoin prices, experts argue that the impact on the market is likely to be minimal. Ki Young Joo, CEO of CryptoQuant, addressed the prevailing fear, uncertainty, and doubt (FUD). He noted that “the US government did not sell 4K Bitcoin today, but it is unlikely to impact the market. Coinbase Prime handled sell-side liquidity ranging from 20K to 49K Bitcoin per day during the rally.” Instant Flows of ETFs And 6-15k per day during low ETF flows. I’m posting this because I’m tired of the government “selling” doubts and fears, as shared via X.
Cryptocurrency Analyst Skew (@52kskew) available For some insight into how these transactions typically happen, “The US government sent 3.94K BTC to Coinbase Prime to be processed by Coinbase Institutional. There are typically two options here: OTC Offices Bitcoin can be auctioned to customers (off-market buyers), or open market auction (sold over time in the market).” Skew’s explanation states that the impact on the price is likely to be fairly small.
Adam Cochrane, Managing Partner at CEHV, Spotlight Bitcoin’s Resilience in Light of Many Bearish Catalysts “With US government concerns, Mt Gox doubts, most major airdrops expiring, markets lower, and Nvidia falling off its highs, BTC had every reason to fall, with its price still mostly at 60 A thousand dollars. Negative news struggles to make an impact.”
Will Gold’s History Repeat Itself for BTC?
In a nod to historical bullish sentiment, Alistair Milne, chief IT officer at Altana Digital, drew parallels with previous government asset sales. “Government selling is bullish,” he said. “Gordon Brown sold UK Treasuries in 1991, but in 2002 “There was a consensus that the government would sell Treasury bonds in 2013.” Gold reserves For less than $300 per ounce. One of the worst decisions ever made by a Chancellor of the Exchequer. Germany and America are making much worse mistakes by selling their now-captured Bitcoin. They can only sell once.”
Government selling is bullish
Gordon Brown sold Britain’s gold reserves for less than $300 an ounce. This is one of the worst decisions ever made by a Chancellor of the Exchequer.
Germany and America are making much worse mistakes by selling their now-captured Bitcoin. They can only sell once pic.twitter.com/i0rZMpuiS0
— Alistair Milne (@alistairmilne) June 26, 2024
In a related context, during his tenure as Chancellor of the Exchequer from 1997 to 2007, Gordon Brown made the decision to sell nearly 60% of the UK’s gold reserves between 1999 and 2002, a period known as the “Brown Bottom.”
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The sales were conducted in a series of auctions at prices ranging between $256 and $296 per ounce – a price well below the price of gold in subsequent years, which rose significantly. The move is widely seen as a financial blunder that cost the British Treasury billions of dollars in potential revenue, as gold prices rose to more than $1,500 an ounce in the following decades.
Furthermore, there is another upside to this. Completing these Bitcoin sales could remove a significant burden on the market as these sales are hanging over the market like the sword of Damocles; once they are done, there is a significant downside risk to the market that is eliminated forever, and it is better to do it sooner rather than later.
At the time of publication, Bitcoin was trading at $61,117.
Featured image created with DALL E, chart from TradingView.com
