In a recent development that shocked crypto enthusiasts globally, the value of Bitcoin has collapsed as Germany liquidates $150 Million in Seized Crypto
Germany’s attempt at liquidating such large amounts of seized Bitcoins will have a significant impact on the Bitcoin market as Germany has the largest share of cryptocurrencies as a nation.
Currently, Germany as a nation holds around 46,359 BTC, which is equivalent to around $2.8 billion. If these cryptocurrencies are supplied to the market through different exchanges, the price of Bitcoin will fall as a result of the high liquidity.
The German government has seized illegally stored cryptocurrencies from many firms recently. For instance, the government seized 50,000 BTC from an illegally run film piracy site called Movie 2K in January this year.
From these seized money, the government has deposited 400 BTC in Coinbase and Kraken. They also transferred 500 BTC to an unidentified address.
The government received 310 BTC back from Kraken, and 90 BTC from wallets connected to Robinhood, Bitstamp, and Coinbase.
A series of transactions that happened throughout the last week has finalized the transactions of bitcoins worth $150 Million to various exchanges by the German government.
What are the Implications of this Move on the Cryptocurrency Market?
Germany’s move to liquidate such a large number of Bitcoins to exchange them for fiat currencies is another huge blow to the authenticity of the decentralized finance market.
The listing of such a large number of Bitcoins on various exchanges indicates an ensuing bearish market for Bitcoins.
Even though the German Bitcoin holdings are only a small fraction of the whole Bitcoin market, the sudden activities intended to sell Bitcoins in exchange for other fiat currency or cryptocurrency will create suspicion in the market about the long-term veracity of the coin.
Germany was forced to make such a move after it seized bitcoins from many illegal holders during the past week. This can mean two things.
- The hike in the market prices of Bitcoin is not real and is partly due to the scarcity of the tokens in the market created by such illegal holdings.
- There is still a larger market sentiment in favor of fiat currencies and against cryptocurrencies. The fear of the general public about the possible fallibility of cryptocurrencies paves the way for such sudden drops in cryptocurrency prices as soon as an unfavorable situation occurs in the market.
Other Factors Contributing to the Price Volatility of Cryptocurrencies
The German government’s activity has partly caused the pressure towards selling Bitcoins now. Other factors have also caused a downward spiral in Bitcoin prices.
For example, Mt.Gox, the largest cryptocurrency exchange in Japan, will start repaying its investors the Bitcoins that were stolen in 2014 by hackers. This activity is thought to send $9 billion worth of Bitcoins to the market, which will raise the liquidity again.
Moreover, there is news that large Bitcoin holders or crypto whales are planning to sell their holdings, another move that is expected to contribute to the price fluctuations. The Bitcoin spot ETFs are also contributing to the sudden market volatility of its price.
The Current Market Analysis of the Price of Bitcoins
The current market price of Bitcoin is $60,661.51. The price is down by 1.3% in the last 24 hours. The price of Bitcoin has seen a large amount of fluctuations in the past 7 days at the range of $59,495.68 – $64,486.93.
The current price is 17.7% lower than the all-time high price of Bitcoin, which was recorded on March 14, 2024, at $73,737.94.
Other significant figures that state the current market conditions of Bitcoins are given below.
Market Capitalization: $1,196,353,530,085
Fully Diluted Valuation: $1,274,118,762,000
24 hour Trading Volume: $23,399,676,942
Circulating Supply: 19,718,275
Total Supply: 21,000,000
Maximum Supply: 21,000,000
The Bottom Line
The sudden instability in the price of Bitcoins due to the recent developments in the market is yet another reminder of the general unpredictability of the price of cryptocurrencies.
It does not sometimes matter how established or strong the coin is in the market, but the price can witness a downfall due to any sudden instabilities in the market.
Even though the expected liquidity rise after Germany’s move regarding listing cryptocurrencies in the exchanges is not substantial when compared to the general acceptability of the coin, speculations regarding the price fluctuations can cause great ramifications in the market.
