On Monday, German authorities intensified the sell-off of bitcoins, which caused a significant price volatility for the largest cryptocurrency on the market by market capitalization, Bitcoin (BTC).
After briefly rising above $58,000 over the weekend, the price of BTC has fallen by more than 2% in the past few hours, with German authorities continuing to raise selling pressure on the BTC market.
German authorities raise bitcoin sales
According to data from blockchain analytics platform Arkham, German authorities initiated a number of transfers to exchanges and market makers, which meant a significant raise in their selling activity.
German authorities’ on-chain wallet data shows the first transaction involved more than 2,730 BTC, equivalent to $155 million, followed by another to move 8100 BTC worth over $463 million.
The authorities continued the sale without stopping the shipments another 5200 BTC $297 million worth of Kraken, Bitstamp, and Coinbase. Combined, these transactions made it the biggest selling day for German authorities, with more than 16,000 BTC sold on Monday alone.
Arkham data Also shows that continued selling pressure from German authorities has reduced their holdings to 23,787.7 BTC, worth approximately $1.32 billion, which is less than half of the BTC originally seized in January 2024.
Ki Juvenile Ju, founder and CEO of market data analytics firm CryptoQuant, indicates that the impact of the government’s sale of BTC may be “overestimated.” According to Ju, the value of BTC seized by the government amounts to about $9 billion in realized cap, which is just 4% of the total cumulative value realized since 2023, suggesting little long-term impact on the BTC market.
Ju further explained that despite $224 billion worth of bitcoin being sold since 2023, the cryptocurrency’s price has increased by 350%, indicating “manageability” liquidity on the sell side for BTC investors.
BTC Stage sees significant comeback with $400 million inflow
Due to the increased sales activity of the German authorities and the resulting volatility in the cryptocurrency market, BTC-based investment products have seen a positive change.
Products tied to the world’s largest cryptocurrency have lost more than $1.2 billion after three weeks, while digital asset investment products have seen a significant recovery, according to a report on Monday. report from asset manager CoinShares.
Bitcoin digital funds led the way with inflows of about $400 million, the data showed. This positive surge in investment came as the price of Bitcoin briefly fell to $54,000, its lowest level since February.
Among Bitcoin funds, Fidelity and ProShares emerged as top candidates, attracting inflows around $200 million and $100 million, respectively. However, the Grayscale fund remained in the red, posting a loss of around $90 million.
Despite this setback, the report indicates that the overall market trend of positive inflows indicates growing interest in digital asset investment products due to the acute price declines recorded.
At the time of writing, BTC has reclaimed the $56,200 level. Despite this, the market’s largest cryptocurrency is down 11% and 7% on the seven-day and 14-day time frames, respectively.
Featured image from DALL-E, chart from TradingView.com
