Bitcoin (BTC) and the broader crypto market are currently facing a potential downtrend due to recent developments involving the US and German governments. On-chain data suggests that both governments are looking to offload a significant amount of their BTC holdings, which could further impact the market.
The US government recently sent 3,940 BTC ($240 million) to Coinbase Prime, raising concerns that they may be planning to sell off these crypto tokens. This BTC was part of the seizure from narcotics trafficker Banmeet Singh, who operated on the Silk Road marketplace. The US government has previously sold off Silk Road BTC, with their last confirmed sale of 9,861 BTC ($216 million) in March. The recent transfer to Coinbase suggests that the BTC has yet to be sold.
Similarly, the German government has also been transferring BTC to crypto exchanges, including Kraken and Bitstamp. They recently moved 125 BTC ($7.71 million) each to these exchanges, following a previous transfer of 400 BTC ($24 million). Additionally, the German government sent 1,000 BTC to an unknown address, possibly another crypto exchange.
The potential sale of BTC by the US and German governments adds to the existing selling pressure on Bitcoin. BTC miners have already sold 30,000 BTC ($2 billion) in June alone, contributing to the cryptocurrency’s decline this month.
In contrast, El Salvador has chosen to hold and accumulate Bitcoin. The country adopted Bitcoin as legal tender in September 2021 and initiated a ‘1 Bitcoin a day program’ in November 2022, where they purchase 1 BTC daily. Data from Arkham Intelligence shows that El Salvador currently holds 5,794 BTC ($351.82 million) and continues to accumulate through foreign investments and mining operations. The government also plans to create a Bitcoin bank to attract foreign investors with seamless Bitcoin investment opportunities.
Overall, the potential offloading of BTC by the US and German governments, combined with existing selling pressure from miners, poses a risk to the crypto market. In contrast, El Salvador’s strategy of accumulating and holding Bitcoin demonstrates a different approach that could influence the market dynamics in the future. As the situation continues to evolve, it will be essential to monitor how these government actions impact the broader crypto market and Bitcoin’s price movements.
