Government Bitcoin Selling Is Overrated, CryptoQuant Founder Says

Addresses linked to the US and German governments have collectively sent over $737 million worth of Bitcoin to crypto exchanges Coinbase, Bitstamp, and Kraken in the past two weeks.

The Bitcoin market has seen several large selloffs since June, mostly from miners and a few other whales. But recent news has shown that the German government is also selling its holdings.

Due to the large size of the transactions, selloffs by the government can be considered whale movements. Many market participants might also say that they have contributed to increased selling pressure and a price decline for Bitcoin.

However, Ki Young Ju, founder and CEO of CryptoQuant, doesn’t agree with this line of thinking. According to him, reactions to selloffs from wallets linked to governments are usually exaggerated. Interestingly, his take is based on the cumulative value of Bitcoin inflows in the past year.

Government Selling Bitcoin Is Overrated

Addresses linked to the US and German governments have collectively sent over $737 million worth of Bitcoin to crypto exchanges Coinbase, Bitstamp, and Kraken in the past two weeks. These transfers, by their nature, can be nothing more than selloffs at the exchanges.

Particularly noteworthy is the fact that these transfers have occurred in the midst of a month-long decline in the price of Bitcoin, which has contributed more to the selling pressure.  

But while headlines about “governments dumping Bitcoin” might spark fear, uncertainty, and doubt (FUD) in the crypto community, the issue is really not that deep. While it’s true that the governments have liquidated a portion of their Bitcoin investments, the sell-off wasn’t actually that huge in the grand scheme of things. 

According to CryptoQuant data shared by Ki Young Ju, Bitcoin has received inflows of over $224 billion since 2023, with only 4% of these being linked to assets seized by governments. Furthermore, the data shows that government-seized BTC has contributed about $9 billion to the realized market cap since 2023.

Govt #Bitcoin selling is overestimated.

$224B has flowed into this market since 2023. Government-seized BTC contributes about $9B to the realized cap.

It’s only 4% of the total cumulative realized value since 2023. Don’t let govt selling FUD ruin your trades. pic.twitter.com/12fy2sKsXH

— Ki Young Ju (@ki_young_ju) July 5, 2024

Going by this realized market cap data, it is obvious that government-owned Bitcoins do not really have much power and are minuscule compared to the funds available in the market. Realized market cap is a unique way of looking at Bitcoin’s true valuation. It takes into account the last price when each BTC last moved from its current position. This gives a more accurate picture of how much fiat currency has really flowed into BTC.

Current State Of Bitcoin

At the time of writing, Bitcoin is trading at $57,360 and is starting to recoup some of its seven-day losses. Recent corrections have seen the crypto fall by the largest magnitude since the bull cycle began at the 2022 low. The crypto is not out of the woods yet. The bulls must keep pushing the price into the $60,000 territory before Bitcoin can resume its upward trend.

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