Germany’s government has offloaded its remaining Bitcoin reserves, officially holding zero BTC as of July 12. According to Arkham Intelligence, the final transaction included 3,846 Bitcoin sent to “Flow Traders and 139Po,” which Arkham identifies as likely institutional deposit/OTC services. This sale marks the end of several weeks of heavy selling pressure from the German government, which has significantly influenced the Bitcoin market.
Impact on Bitcoin Market
Over the past three weeks, Germany’s government sold tens of thousands of Bitcoin, totaling around 50,000 BTC. This massive sale, resulting from asset seizures, contributed to keeping Bitcoin’s price below the $60,000 mark and its 200-day exponential moving average. The substantial institutional selling pressure has been a key factor in the suppressed market conditions.
Ongoing Market Pressure from Mt. Gox Reimbursements
Despite the German government exhausting its Bitcoin reserves, the market may continue to face downward pressure from the $9 billion Mt. Gox reimbursement plan. Analyst Jacob King predicts that investors could sell up to 99% of the $8.2 billion worth of Bitcoin from the collapsed exchange, which shuttered in 2014 when Bitcoin was valued in the hundreds.
Conversely, IG Markets analyst Tony Sycamore argues that the impact of the Mt. Gox reimbursements might not be as severe as feared. Sycamore believes that many factors will influence the behavior of Mt. Gox creditors and suggests that around half of the reimbursement supply could hit exchanges in July. He also asserts that the market has likely already priced in the effects of the reimbursement plan, as it has been known to investors for some time.
Institutional Investors Seize the Opportunity
Amid the selling pressure, institutional investors have taken advantage of lower Bitcoin prices. Data from CoinShares shows that U.S. exchange-traded funds (ETFs) saw $295 million in inflows for the week of July 8, reversing several weeks of subdued inflows into these investment funds. This activity suggests that institutional investors are buying the dip, potentially stabilizing the market.
