- The Bitcoin price slump was initially blamed on sales by Mt. Gox and Germany, yet the impact appears minimal.
- Observers mistakenly thought Germany was buying BTC, but they were only moving it back to government wallets.
- Although US$9 billion from government-seized Bitcoin has entered the market since 2023, it represents just 4% of the total.
With the Bitcoin price slumping as much as 20% in a month, many blamed Mt. Gox and German sales of seized BTC for the price action.
After a German MP called on her government to accumulate BTC instead of selling it and Justin Sun offering to step in to buy BTC over the counter to minimise the effect on the market, it looked like selling had stopped.
Related: Aussie Analyst Jason Pizzino Reveals Biggest Threat to Crypto Right Now
Over the weekend some observers posted to platform X that the Germans are now buying BTC – but it turned out this was more the case of transferring the coins back to government-controlled wallets from central exchanges.
Government-Seized BTC Only Accounts For 4% Of Total Cumulative Realised Value
Nevertheless, with all this going on the question is: how much influence did this really have on the market and BTC price?
Not much, if you believe Ki Young Ju, founder and CEO of analytics platform CryptoQuant. In a post to his 350K followers he said that the government Bitcoin sales are “overestimated”.
The CEO added that since 2023, US$224 billion (AU$332 billion) has entered the market, with US$9 billion (AU$13.3 billion) from government-seized Bitcoin, making up only 4% of the total.
His advice:
Don’t let govt selling FUD ruin your trades.
Ki Young Ju“Whale Wallets” Benefit from Weeks of Volatility
Meanwhile, wallets with more than 10K of Bitcoin seem to be benefiting the most from the recent crash. Analytics platform Santiment said:
Wallets with 10K+ Bitcoin have been the extreme beneficiaries of the past 6 weeks of volatility.
SantimentIt’s speculated that many of these large wallets are owned by exchange liquidity providers – entities that supply the market with enough volume and liquidity to facilitate trading without large price swings.
The accumulation of a large amount of Bitcoin by a few large addresses may lead to greater market control and liquidity consolidation.
Related: US Spot Bitcoin ETFs See Record Inflows Amid Price Crash
Additionally, by increasing their holdings, these key players can help stabilise the market during periods of volatility through their capacity to supply liquidity.
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