Dear Readers,
German government has officially emptied its Bitcoin reserves after weeks of consistent selling, pushing the cryptocurrency market below $60,000.
Final Bitcoin Offload
On July 12, Germany sold the last of its Bitcoin holdings, according to Arkham Intelligence. The final transaction involved 3,846 Bitcoin (BTC) transferred to "Flow Traders and 139Po," likely as an institutional deposit or OTC service. This transaction marked the culmination of weeks of selling tens of thousands of Bitcoin in several tranches.
Impact on Market Prices
The German government offloaded around 50,000 Bitcoin over three weeks, largely stemming from asset seizures. This significant volume of Bitcoin hitting the market played a crucial role in keeping prices below $60,000 and under the 200-day exponential moving average.
Source : Coinpediamarkets
At the time of writing, BTC was trading at $57,835.24, showing a 1.43% increase in the last 24 hours.
Continuing Market Pressure
Although Germany has exhausted its Bitcoin reserves, other factors continue to pressure the market. The $9 billion Mt. Gox reimbursement plan, which involves compensating creditors of the defunct exchange, might keep Bitcoin prices suppressed in the coming weeks. Analyst Jacob King suggests that up to 99% of Mt. Gox's $8.2 billion could be sold by investors seeking profits.
Diverging Analyst Opinions
Estimated Mt. Gox distributions. Source: Galaxy Research
Opinions vary on the impact of the Mt. Gox payments. IG Markets analyst Tony Sycamore believes the payments won't have the catastrophic effect many fear. He argues that various factors will influence creditors' actions, predicting that half of the reimbursement supply could hit exchanges in July. Sycamore also noted that the reimbursement plan had been anticipated by investors, likely already factored into the market.
Institutional Investors Step In
Despite the selling pressure, institutional investors took advantage of the situation by buying the dip. data shows that U.S. exchange-traded funds (ETFs) saw $295 million in inflows for the week of July 8, reversing several weeks of low investment activity
Bitcoin ETFs posted $295 million worth of new inflows on July 8. Source: Farside
Germany's recent Bitcoin liquidation may have played a role in recent market dynamics, but with institutional interest remaining strong, the long-term outlook for Bitcoin remains uncertain.
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