Fears Of Bitcoin Sales By US And German Govts Are FUD, Even Bullish: Experts
June 27 2024 - 9:00AM
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Amidst 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 heightened
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. Concurrently,
the US government transferred 4,000 BTC to Coinbase, likely aiming
for 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, remarked on the synchronicity
of these events. “All at the same time—US Govt selling seized Silk
Road Bitcoin, US Govt selling seized Banmeet Singh BTC, German Govt
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 kind of coordination/underlying intention,” Kling stated
via X. Related Reading: Bitcoin Near ‘Euphoria’ Boundary: What
Happens After A Breach? Despite concerns that these sales could
pressure Bitcoin prices, experts argue that the impact on the
market is likely minimal. Ki Young Ju, CEO of CryptoQuant,
countered the prevalent fear, uncertainty, and doubt (FUD). He
noted, “US gov’t sold 4K Bitcoin today, but it’s less likely to
impact the market. Coinbase Prime handled 20-49K BTC in sell-side
liquidity daily during high spot ETF inflows and 6-15K daily during
low spot ETF inflows. Posting this because I’m tired of ‘gov’t
selling’ FUDs,” as shared via X. Crypto analyst Skew (@52kskew)
provided insights into how these transactions typically occur, “US
Gov sent 3.94K BTC to Coinbase Prime to be handled by Coinbase
Institutional. There’s typically two options here: OTC desks can
auction off the BTC to clients (off-market buyers), or an open
market auction (sold over time on the market).” Skew’s explanation
makes it clear that the impact on the price is likely to be rather
small. Adam Cochran, managing partner at CEHV, highlighted the
resilience of Bitcoin in light of multiple bearish catalysts, “Also
with US Gov FUD, Mt Gox FUD, most major airdrops finished, markets
down, Nvidia off highs, BTC has had every reason to go lower, and
it’s still mostly held $60k. Negative news struggling to make a
dent.” Will Gold’s History Repeat Itself For BTC? Echoing a
historically bullish sentiment, Alistar Milne, CIO of Altana
Digital, drew parallels to past government sales of assets,
“Government selling is bullish. Gordon Brown famously sold the UK’s
Gold reserves for less than $300/ounce. One of the worst decisions
made by a Chancellor of the Exchequer, ever. Germany & America
are making far worse mistakes by selling seized BTC now. They can
only sell once.” Government selling is bullish Gordon Brown
famously sold the UK’s Gold reserves for less than $300/ounce. One
of the worst decisions made by a Chancellor of the Exchequer, ever
Germany & America are making far worse mistakes by selling
seized BTC now. They can only sell 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.” Related Reading: Bitcoin Selloff: German Gov’t Offloads
Another $67 Million As Price Wobbles The sales were conducted in a
series of auctions at prices that ranged between $256 and $296 per
ounce—significantly below the gold price in subsequent years, which
saw a substantial rise. This action is widely regarded as a
financial misstep that cost the UK treasury billions in potential
revenue, as gold prices surged to over $1,500 per ounce in the
following decades. Moreover, there’s another bullish aspect to
this. The finalization of these BTC sales could remove a
significant overhang on the market as these sales are hanging above
the market like a Damocles sword; once done, there’s a major
downside risk for the market forever eliminated, better early than
late. At press time, BTC traded at $61,117. Featured image created
with DALL·E, chart from TradingView.com
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