On Monday, German authorities intensified their Bitcoin sell-off, leading to significant price volatility for the largest cryptocurrency on the market by market cap: Bitcoin (BTC).
After briefly spiking above $58,000 over the weekend, BTC has seen a more than 2% pullback in the past few hours as German authorities continue to increase ongoing selling pressure in the BTC market.
German Authorities Increase Bitcoin Selling Activity
According to data from blockchain analytics platform Arkham, German authorities have made multiple transfers to exchanges and market makers, marking a significant increase in their selling activities.
On-chain data from the German authorities’ wallet shows that the first transaction involved more than 2,730 BTC, equivalent to $155 million, followed by an additional Handover of 8,100 BTC worth over $463 million.
The authorities continue their sell-off without stopping by another 5,200 BTC worth $297 million across Kraken, Bitstamp, and Coinbase. The transactions cumulatively made it the largest day of selling for German authorities, with over 16,000 BTC sold on Monday alone.
Arkham facts Also it turns out that sustained selling pressure from German authorities has reduced their holdings to 23,787.7 BTC, worth approximately $1.32 billion. That’s less than half of the BTC originally seized in January 2024.
Ki Young Ju, the founder and CEO of market data analytics company CryptoQuant, suggests that the impact of the government’s BTC sale may be “overstated.” According to Ju, government-seized BTC accounts for about $9 billion of the realized market cap, just 4% of the total cumulative realized value since 2023. This suggests that the impact on the BTC market is small in the long term.
Ju further explained that despite $224 billion worth of Bitcoin being sold since 2023, the cryptocurrency’s price has increased by 350%, indicating “manageable” liquidity on the selling side for BTC investors.
BTC Makes Remarkable Comeback With $400 Million Inflows
Following the increased sales activity by German authorities and the resulting volatility in the crypto market, BTC investment products have seen a positive turnaround.
After three weeks, products linked to the world’s largest cryptocurrency lost more than $1.2 billion, and digital asset investment products experienced a remarkable turnaround, a report said Monday report from asset manager CoinShares.
According to the data, Bitcoin digital funds led the way with around $400 million inflows. This positive surge in investments came as Bitcoin’s price briefly dropped to $54,000, marking its lowest level since February.
Among Bitcoin funds, Fidelity and ProShares emerged as the top contenders, which inflow of approximately $200 million and $100 million, respectively. However, Grayscale’s fund remained in the red, suffering losses of approximately $90 million.
Despite this setback, the report suggests that the overall market trend of positive inflows indicates growing interest in digital asset investment products, following the dramatic price drops recorded.
At the time of writing, BTC reached the $56,200 level. Still, the largest cryptocurrency in the market is down by 11% and 7% in the seven-day and 14-day timeframes respectively.
Main image of DALL-E, chart from TradingView.com