Germany keeps selling, but the price of bitcoin doesn’t care anymore
Bitcoin (BTC) is approaching $60,000 again, a figure from which it fell almost a week ago, causing some fear among investors.
At the time of this publication, as can be seen in the following TradingView chart, Each BTC is trading for around $58,500 on major exchanges:
As CriptoNoticias has recently explained, one of the main drivers of the fall of bitcoin was the fact that The German government is selling BTC that was once seized.
The Arkham Intelligence platform in the image shared below allows you to view How Bitcoin holdings by wallets linked to the German government have been reduced.
The German state wallet has lost more than 10,000 bitcoin since he started sending funds to exchanges. Not even criticism from certain sectors of the opposition prevented him from continuing this strategy.
The most recent movement was detected just minutes before this note was published. Today, July 10, 2024, 3,000 BTC were sent to the Flow Traders platform.
By simple law of supply and demand, these movements impacted the market over the last few days, causing the price of BTC to drop. But, after the initial shock caused by the news that the German government is getting rid of its bitcoin, There were many who decided to take advantage of the occasion to accumulate “sale” sats.
On-chain analytics company CoinShares concludes that Big investors are putting significant sums of money into cryptocurrency-based investment funds. These moves have accelerated over the past week. “It’s probably being seen as a buying opportunity,” said James Butterfill, head of research at CoinShares, regarding the German government’s selling.
In addition, Bitcoin ETFs in the United States have seen a return of money, after a few days in the red.
The following chart, taken from the SoSoValue platform, shows how much net money flows into and out of bitcoin ETFs each day:
Given all this, it can be said that Investors who have understood the intrinsic value of bitcoin are benefiting from the German state’s decision.
It should be remembered that bitcoin is a scarce asset (there will never be more than 21 million units) and that, among other properties it has, makes it valuable and its price tends to increase over time as long as demand also increases.
Saifedean Ammous, in his book ‘The Bitcoin Standard’ explains that Satoshi Nakamoto (creator of Bitcoin) was able to invent both digital scarcity and absolute scarcity:
«Bitcoin is the first example of a digital good that is scarce and cannot be reproduced indefinitely. (…) Bitcoin is the first example of a digital good whose transfer prevents the issuer from owning it. Aside from digital scarcity, Bitcoin is also the first example of absolute scarcity – the only liquid commodity (digital or physical) with a fixed, determinate quantity that cannot, in theory, be invented. Until the invention of Bitcoin, scarcity was always relative, never absolute.»
Saifedean Ammous, «The Bitcoin Standard», Valleta Editions, 2019, p.237.
Therefore, It may be smart to hoard bitcoin—as those taking advantage of the price drop are doing—knowing that it will become increasingly difficult to do so in large quantities.
Ki Young Ju, CEO of on-chain analytics firm CryptoQuant, spoke out about what Germany is doing. For this businessman who is familiar with financial markets, the sales of BTC by governments are simply “a drop in the ocean.” It is about exceptional cases that do not constitute a constant trend. Therefore, for him, these sales should not be overvalued. The relative impact they can have on the price of BTC is low and will not extend too far over time.
According to analysts at the Bitfinex exchange, several data suggest that Bitcoin has hit a local bottom as it fell below $54,000days ago. If this is true, there should not be any further declines, at least in the short term. In any case, Bitfinex warns that various macroeconomic or non-bitcoin factors could change the outlook, so it will be necessary to keep an eye on news from the ecosystem.
