The German state of Saxony has been selling off its bitcoin holdings at a rapid pace, with another batch of confiscated assets being moved to various crypto exchanges and brokers on Thursday. According to blockchain data by Arkham Intelligence, a total of 10,567 BTC worth over $600 million were transferred to exchanges such as Bitstamp, Coinbase, Kraken, and others, including Flow Traders and Cumberland DRW.
After these transactions, the wallets linked to the German authorities now only hold 4,925 BTC worth $285 million, significantly down from the initial 50,000 BTC worth nearly $3 billion that they started with three weeks ago. It is expected that Germany’s selling spree could come to an end as early as Friday or early next week, based on the current pace of selling, which has seen roughly 35,000 BTC unloaded this week.
However, there is some uncertainty in the final tally due to the unusual practice of the wallets receiving a portion of the assets back from exchanges and brokers before the end of the day. Greg Cipolaro, the head of research at digital asset manager NYDIG, has described this on-chain activity as “perplexing” in a note on Wednesday.
The impending conclusion of Germany’s $3 billion selling spree may help alleviate concerns among crypto investors who have been closely monitoring large potential sellers in the market. There have been fears of a supply overhang impacting asset prices, with Bitcoin experiencing a 15% correction over the past month.
This correction has coincided with the U.S. government’s movement of $240 million worth of Silk Road-related BTC to Coinbase, as well as the estate of the defunct Japanese exchange Mt. Gox beginning repayments of 140,000 BTC to creditors this month. These events have raised concerns that creditors may choose to cash out after waiting for over ten years.
Despite these fears, NYDIG’s Cipolaro believes that worries about sell pressure may have been exaggerated. He suggests that Bitcoin’s decline has surpassed the potential price impact if all the selling materializes as expected.
In conclusion, the recent movements in the crypto market, particularly regarding Germany’s bitcoin selling spree and other large potential sellers, have sparked concerns among investors. However, experts like Cipolaro suggest that these fears may be overblown, and the market could see stabilization in the near future.