The Bitcoin market is experiencing significant volatility, with notable swings triggered by massive liquidations by large holders known as “whales” and, more recently, allegations of sell-offs by government entities such as the German government. These actions are categorized as whale movements due to the substantial volume of transactions, fueling a narrative of selling pressure in the market. However, according to Ki Young Ju, CEO of CryptoQuant, the reality of these government influences may be less alarming than the general perception suggests.

In recent weeks, addresses associated with the U.S. and German governments have moved around $737 million worth of Bitcoin to recognized exchanges such as Coinbase, Bitstamp and Kraken. These transactions have been interpreted as signs of a sell-off, coinciding with a decline in Bitcoin’s value that has persisted throughout the month. Despite the bearish trend and negative headlines, Ju stresses that the situation is not as dire as it seems.

CryptoQuant’s analysis reveals that of the total Bitcoin market volume in 2023, which exceeds $224 billion, only about 4% are assets seized by government authorities. In absolute terms, this represents approximately $9 billion added to Bitcoin’s realized market value since last year. Compared to the total market, this amount is relatively modest, indicating that government-owned Bitcoins have limited impact on the overall market landscape.

The concept of realized market capitalization helps to better understand the value of Bitcoin. This method takes into account the price at which each Bitcoin was last traded, providing a clearer perspective on the true volume of fiat money invested in the cryptocurrency and presenting a more accurate portrayal of its value.

Even with the recent corrections, which mark the largest since the beginning of the last bull cycle in 2022, Bitcoin’s situation still requires caution. To maintain an upward trajectory, prices need to return to the $60,000 level.

While significant liquidations, including government liquidations, can induce volatility and price declines in the short term, their long-term impact appears to be overstated. The Bitcoin market is showing resilience, and its maturity will likely be influenced more by institutional investment than by large, isolated transactions.


The views and opinions expressed by the author, or any person mentioned in this article, are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.


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