The German law enforcement agency, BKA, has recently made a significant move involving approximately 6,500 Bitcoin. This action highlights the contrasting positions of governments when it comes to holding BTC and the potential impact it could have on the market.
According to reports, the German federal police transferred Bitcoin worth around 670 billion Yen to a crypto deposit wallet on Wednesday. This development has sparked speculation about a possible drop in Bitcoin’s value to $63,000.
Blockchain data analysts at Arkham have identified the movement of 6,500 BTC from a wallet associated with the German Federal Criminal Police Office (BKA). The transaction involved transferring the Bitcoin to a new address before depositing portions of it into crypto exchanges Kraken and Bitstamp. These deposits are estimated to be worth around 5 billion Yen, indicating a potential sell-off.
The assets that were transferred originated from a seizure by Saxony police in January. The operation targeted a suspected pirate website, resulting in a total capture of 50,000 BTC. This seizure was a significant achievement for the German law enforcement agency.
This news comes amidst a broader discussion about government holdings of Bitcoin. Currently, the United States holds the most Bitcoin among all governments, with an estimated 212,847 BTC as of April. This marks an increase from the previously reported 207,189 Bitcoin holdings.
While the US government holds a substantial amount of Bitcoin, the Wall Street Journal notes its lack of concern about the cryptocurrency’s value fluctuations, unlike other investors. In April, the government transferred 30,174 BTC to the Coinbase crypto exchange.
El Salvador is another country with a significant Bitcoin holding. As of early May, the government held 5,750 Bitcoin. This move follows the country’s groundbreaking decision to adopt Bitcoin as legal tender in 2021. To track its Bitcoin holdings, El Salvador has launched its own proof-of-reserves website, as previously announced by Crypto News Flash.
The intentions of the German police regarding the recently seized Bitcoin remain unknown. However, many investors and analysts are closely monitoring the market to see if the price of Bitcoin will drop to $63,000.
At the time of writing, BTC is trading at $65,847, showing a 1.08% increase in the past day. Its market capitalization is valued at $1.2 trillion, with a trading volume of $20.4 billion.
Considering the current market dynamics and Bitcoin’s historical behavior following significant governmental moves, a drop to $63,000 is a possibility. This projection is based on market reactions to the potential liquidation of large Bitcoin holdings and recent outflows in the spot ETF market.
However, due to the well-known volatility of the crypto market, making firm predictions is challenging. Additionally, new research from Glassnode indicates that a significant number of Bitcoin investors are still profitable, with over 87% of the circulating supply held in profit.