Amid concerns about the US and German governments selling Bitcoin, experts in the industry have stepped in to reassure investors that this may actually be a positive development for the market.
Yesterday, there was increased volatility in the Bitcoin sector as the German Federal Criminal Police (BKA) continued to sell off Bitcoin, reducing their 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 still holding a significant 213,546 BTC in reserves.
Travis Kling, founder of Ikigai Asset Management, pointed out the coordinated nature of these sales, suggesting that there may be an underlying intention behind them. Despite worries that these sales could drive down Bitcoin prices, experts like Ki Young Ju, CEO of CryptoQuant, have argued that the impact on the market is likely to be minimal.
Crypto analyst Skew explained that the Bitcoin sent to Coinbase Prime by the US government could be auctioned off to clients through OTC desks or sold gradually on the open market, reducing the likelihood of a significant price drop.
Adam Cochran, managing partner at CEHV, highlighted Bitcoin’s resilience in the face of negative news and bearish catalysts, noting that despite various factors that could have pushed prices lower, Bitcoin has managed to hold at around $60,000.
Alistar Milne, CIO of Altana Digital, drew parallels between the current government sales of Bitcoin and past instances where governments sold off assets at low prices, resulting in missed opportunities for significant revenue.
Looking back at history, he referenced Gordon Brown’s decision to sell off a large portion of the UK’s gold reserves at low prices, a move that cost the UK treasury billions in potential revenue as gold prices soared in the following years.
The finalization of these Bitcoin sales could potentially remove a significant overhang on the market, reducing the risk of a major price drop in the future. At the time of writing, Bitcoin was trading at $61,117.
Overall, experts believe that while the government sales of Bitcoin may have initially sparked concerns among investors, the long-term impact on the market is likely to be minimal, with the potential for a positive outcome as these sales are completed.