- Germany sold a large portion of its seized BTC holdings, causing the price to drop.
- Holder profitability declined, while the number of long-term holders decreased.
Bitcoin [BTC] fell below the $65,000 level in recent days, lowering sentiment around the king coin.
What is Germany doing?
The German crypto asset is in the spotlight after a recent fire sale. Over the past two days, the German government has lost almost 1,700 Bitcoins, worth as much as $110 million, through major exchanges such as Kraken, Coinbase and Bitstamp.
While this may seem like a significant move, it is just a drop in the bucket compared to their massive $43 billion Bitcoin stash.
This on-chain activity suggests a deliberate strategy to offload a small portion of their Bitcoin holdings.
It is worth noting that Germany has been accumulating Bitcoin through seizures, with a total of 50,000 seized in recent years.
According to Ki Young Ju, CEO of CryptoQuant, despite this recent sale of 3,000 BTC, Germany is still sitting on a big pile of unrealized profits.
Source:
The recent rise in BTC prices has significantly inflated the value of German investments. Their current inventory is estimated at a whopping $3.24 billion, of which as much as $1.1 billion is unrealized profit.
This puts them firmly in the position of the fourth largest Bitcoin holder in the world, behind the US, China and the UK.
Interestingly, the US holds a significantly larger amount: 213,246 Bitcoins, worth $13.7 billion. China, despite a ban on Bitcoin transactions and a major sell-off in 2019, still surprisingly has a significant supply of 190,000 Bitcoins.
This recent German sell-off, coupled with outflows from spot Bitcoin ETFs, is being blamed for the current selling pressure on Bitcoin.
Bitcoin is starting to suffer
At the time of writing, BTC was trading at $64,562.51 and the price was down 1.29% in the past 24 hours.
The MVRV ratio for BTC had also fallen, indicating that most holders were not profitable at the time of writing. This could further negatively impact sentiment around BTC.
Read Bitcoin’s [BTC] Price forecast 2024-25
However, the low profitability also means that most companies will have to wait to sell before they can make a profit.
In combination with this, the difference between long and short around BTC had also decreased, indicating that the number of long-term addresses holding BTC had decreased.
Source: Santiment