The Bitcoin market has been filled with Several whale sales Since June. Most of this selling has come from miners and some other whales, although there has been recent news that German government She also sells her property.
Due to the huge volume of transactions, Government sales These can be classified as whale moves. Many market participants can also claim to have contributed to Increase in selling pressure And the price of Bitcoin is falling.
However, Ki Young Joo, founder and CEO of CryptoQuant, disagrees. According to him, the reactions to the sell-off from government-linked wallets are mostly exaggerated. Interestingly, his view is based on the cumulative value of Bitcoin inflows over the past year.
Government selling bitcoin is overrated
Addresses linked to the US and German governments have sent over $737 million worth of bitcoin to cryptocurrency exchanges Coinbase, Bitstamp, and Kraken in the past two weeks. These transfers, by their very nature, can only be considered exchange sells.
It is particularly noteworthy that these transfers occurred amid a month-long decline in the price of Bitcoin, which further contributed to the selling pressure.
However, while headlines about “governments dumping bitcoin” may stir fear, uncertainty, and doubt in the crypto community, the issue is not really that deep. While it is true that governments have liquidated a portion of their bitcoin investments, the selloff was not actually that massive in the grand scheme of things.
According to CryptoQuant data shared by Ki Young Ju, Bitcoin has received over $224 billion in inflows since 2023, with only 4% of those inflows being linked to government-seized assets. Furthermore, the data shows that government-seized BTC has contributed around $9 billion to the market cap since 2023.
the government #Bitcoin Oversold.
$224 billion has flowed into this market since 2023. Government-seized Bitcoin contributes about $9 billion to the cap.
It’s only 4% of the total cumulative value generated since 2023. Don’t let government selling fears and doubts ruin your trades. pic.twitter.com/12fy2sKsXH
— Ki Young Ju (@ki_young_ju) July 5, 2024
Looking at the realized market cap data, it is clear that government-owned bitcoins do not really have much power and are insignificant compared to the money available in the market. Realized market cap is a unique way of looking at the true value of bitcoin. It takes into account the last price that each bitcoin has moved from its current position. This gives a more accurate picture of how much fiat currency has actually flowed into bitcoin.
Current state of bitcoin
At the time of writing, Bitcoin is trading at $57,360, beginning to recoup some of its losses from seven days ago. Recent corrections have seen the cryptocurrency’s value decline. decrease as much as possible Since the bullish cycle started at the low of 2022. The cryptocurrency is Not out of the woods So far. Bulls need to continue pushing the price to the $60k area before Bitcoin can resume its upward trend.
Featured image by Getty Images, chart by TradingView