
Bitcoin's decline appears to be linked to an anticipation of massive sell-offs in the coming months. Really ?
Germany shoots itself in the foot again
The German Federal Criminal Police Office recently transferred part of the 50,000 bitcoins confiscated in 2013 in a criminal case to the Coinbase exchange.
According to Arkham data, the equivalent of nearly 500 million euros has been transferred in several installments since June 19. These transfers could indicate that the German government intends to liquidate part of its bitcoins.
Bitcoin briefly fell below $60,000 in anticipation of downward pressure on the price. The German government wallet still contains more than 46,000 bitcoins worth almost $3 billion.
This is not a small amount. Let us recall that American ETFs had to absorb nearly 15 billion dollars to raise bitcoin to $70,000.
Speaking of ETFs, note that cumulative net flows have turned negative since June 10. In other words, “sophisticated” investors are also wary of possible summer downward pressure.
The FUD could therefore continue if the German government continues to transfer bitcoins from its wallet to Coinbase.
500 BTC to Coinbase, 125 BTC to Kraken, 125 BTC to Bitstamp »
Other FUD of the moment: the old sea serpent Mt. Gox.
Mt. Gox Checkout
More than a decade later, Japanese justice is preparing to reimburse Mt. Gox customers who lost nearly 950,000 bitcoins in 2014, or nearly $570,000 million at the time.
Just 141,868 bitcoins will soon be returned to nearly 20,000 creditors. That's the equivalent of 9 billion dollars. This is more than half of the 15 billion dollars absorbed by ETFs since their launch! However…
Mt. Gox's bankruptcy proceedings offer creditors three options:
-Receive payment of around 90% right now in bitcoins.
-Potentially wait 3 to 5 more years to receive the full amount.
-Receive their payment in cash without discount, but with an unknown additional delay…
The Galaxy firm estimates that 75% of reimbursements will be made “in-kind”, that is to say directly in bitcoins. So, while the market expects a downside pressure of 141,868 BTC, Galaxy Research predicts the amount to be significantly lower.
Around 65,000 BTC is expected to be delivered to individual creditors. And 30,000 BTC to claim funds and a separate bankruptcy. It can be reasonably assumed that most of the BTC received by funds that have acquired claims from creditors will be distributed in-kind and therefore will not be sold.
Furthermore, the 20,000 creditors of the pool of 65,000 BTC are early investors who have certainly had time to recover. We can therefore imagine that a large majority of the 20,000 creditors will keep their bitcoins.
These bitcoiners have resisted convincing and aggressive offers from debt buyers for more than 10 years. This suggests that they want to recover bitcoins, not fiat currency. Not to mention the tax consequences on capital gains which could further discourage any sale…
Bitcoin miners have their backs
Miners have sold more than 30,000 BTC since the beginning of June, worth about $2 billion. This is the highest amount of the year.
The amount of bitcoin held by miners has fallen to its lowest level in over 14 years old according to data from IntoTheBlock.
On June 19, miners' reserves fell to 1.9 million bitcoins. They were at 1.95 million BTC at the start of the year.
It seems that miners have learned lessons from past cycles. The days of over-indebtedness and holding too many bitcoins are over. Many of them sell part of their reserves at the highest, as a precaution.
Especially since halving and increased competition mean that the quantity of bitcoins produced by TH decreases, which increases production costs. THE hashprice is now at ~$0.05/Th/Day, approaching its all-time low (0.044/TH/Day).
Minors’ reserves will need to be closely monitored. A rise will coincide with a relaxation of this downward pressure which has been building since the beginning of June.
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