German Government Resumes Sell-Off as Bitcoin Dips, El Salvador HODLs
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The German government has resumed selling off its seized Bitcoin assets amidst a recent dip in the cryptocurrency’s price.
Germany, the largest economy in Europe, began offloading portions of its substantial Bitcoin stockpile worth approximately $3 billion.
These assets were confiscated from Movie2k.to, a movie piracy website, in 2020.
In January, German police seized 50,000 BTC from the piracy website, marking it as the “most extensive security of Bitcoins by law enforcement authorities in the Federal Republic of Germany to date,” according to a press release.
Last week, the country sold around $325 million worth of Bitcoin, with the possibility of further sales.
More recently, the German government transferred 200 BTC to Coinbase, while the same wallet also moved 200 BTC to Kraken.
🔔 Breaking News: The German government has just transferred 200 BTC to Coinbase. Simultaneously, this wallet also moved 200 BTC to Kraken. This could lead to significant market fluctuations! 🚀📉#Bitcoin #CryptoNews #MarketUpdate #BTC #Germany pic.twitter.com/ImCwX3fHoT
— BoKuBu (@atrungbs87) June 25, 2024
El Salvador Keeps Accumulating
El Salvador has been steadily increasing its Bitcoin holdings since adopting the cryptocurrency as a legal tender in September 2021.
As of the latest data, the country holds approximately 5,748 BTC, valued at around $360 million.
The country’s Bitcoin stash has been accumulated through direct purchases, mining, and investments from foreign entrepreneurs seeking residency through the country’s crypto-friendly policies.
The Salvadoran government has consistently added to its Bitcoin treasury, including a policy of purchasing 1 BTC daily.
This strategy has continued despite market fluctuations, demonstrating a commitment to holding (“HODL”) its Bitcoin assets over the long term.
It is worth noting that President Nayib Bukele has been vocal about not selling the country’s Bitcoin holdings, even as their value has increased significantly.
Recently, Bukele mentioned that the country’s Bitcoin investments have risen more than 40% in value.
Bitcoin Dips Below $60,000
The sell-off by the German government aligns with a temporary drop in the price of Bitcoin, which briefly fell below the $60,000 mark.
In addition to the German sell-off, another event that could impact the market is the impending distribution of Bitcoin owed to former customers of the defunct cryptocurrency exchange Mt. Gox.
This distribution could involve up to 140,000 BTC entering the market.
Mt. Gox, which filed for bankruptcy over a decade ago following multiple hacking incidents, announced its intention to return assets to customers starting in July.
The exact amount of Bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 BTC, potentially valued at up to $9 billion.
While concerns have been raised about the potential selling pressure caused by the influx of BTC, some argue that the impact may be overstated.
Creditors have had years to sell their claims if they needed immediate funds, which could mitigate the potential negative effects on prices.
Meanwhile, digital asset investment products, as a whole, experienced a second consecutive week of outflows, amounting to $584 million.
The pessimism among investors regarding potential interest rate cuts by the Federal Reserve is believed to be a contributing factor.
Last week also saw the lowest trading volumes on ETPs globally since the launch of U.S. ETFs in January, with a total of just $6.9 billion traded throughout the week.
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