Concerns about the stability of the crypto market rose sharply today as the German government continued its aggressive sale of confiscated Bitcoin BTC/USD on Monday.
What Happened: According to blockchain analysis firm Arkham, German authorities have moved an additional 8,100 BTC (worth approximately $463.2 million) to exchanges and market makers since their previous update earlier today.
This latest move comes on the heels of an earlier transfer reported by Arkham, where the German government sent 2,738.7 BTC (worth $155.3 million at the time) to likely exchanges and market makers, including Kraken, Cumberland and other addresses associated with institutional or over-the-counter (OTC) services.
The most recent transfer, occurring within minutes of the report, saw $200 million worth of Bitcoin sent to Flow Traders, a prominent market maker.
Following these transactions, the German government still holds 28,988 BTC, valued at approximately $1.66 billion.
This accelerated sell-off coincides with a downturn in Bitcoin’s price.
At the time of reporting, Bitcoin was trading around $56,050, down 1.5% over the past 24 hours, having earlier touched a low of $55,064.
Also Read: These Altcoins Show Bullish Signals While Bitcoin Faces Critical Juncture
Why It Matters: The timing of these large-scale transfers has led some market analysts to speculate about a potential correlation between the German government’s actions and the recent price volatility.
The German government’s decision to liquidate its Bitcoin holdings through exchanges and market makers, rather than through public auctions as seen in some past cases of government cryptocurrency sales, marks a shift in approach.
This method allows for a more gradual distribution of assets into the market, potentially mitigating sudden price impacts.
Joana Cotar, a member of the German Bundestag, has been vocal about the government’s approach to its Bitcoin holdings.
Cotar criticized the decision to liquidate Bitcoin, arguing that it would be more strategic to hold the digital currency as a reserve.
“Bitcoin offers a unique opportunity to diversify the state’s assets and protect against inflation and currency devaluation,” she stated in a recent letter to government officials.
Cotar also highlighted the potential benefits of fostering a Bitcoin-friendly regulatory environment, which could promote innovation and attract top talent to Germany.
She emphasized the need for comprehensive strategies, such as retaining Bitcoin in the state treasury and issuing Bitcoin bonds, to enhance economic sovereignty and technological progress.
What’s Next: The upcoming Benzinga Future of Digital Assets event on Nov. 19 bring together industry leaders, investors, and analysts to discuss the latest trends and forecasts in the cryptocurrency space.
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