The German and U.S. governments recently purchased significant amounts of cryptocurrencies, hinting at a possible market correction as investors anticipate a rebound in July. These strategic moves typically occur in a period characterized by market optimism following the historic decline in June.
Expectations for a July recovery continue, and stakeholders are wondering what impact these government actions will have on the market.
What are the threats to Bitcoin's recovery in July?
There was a massive transfer of 1,500 Bitcoin (BTC) worth approximately $94.7 million from the German government's cryptocurrency wallet. Of these, 400 BTC worth $25.3 million were transferred to major cryptocurrency exchanges such as Bitstamp, Coinbase, and Kraken. This suggests that the German government plans to sell 400 BTC.
Since June 19, 2024, net cryptocurrency remittances in Germany have totaled 5,167 BTC, equivalent to approximately $330.3 million at an average price of $63,924. Currently, the cryptocurrency wallet holds a significant amount of cryptocurrency: 44,692 BTC, equivalent to approximately $2.81 billion.
Read more: Who will own the most Bitcoin in 2024?
Likewise, the U.S. government transferred 3,375 Ethereum (ETH) worth $11.75 million to a new cryptocurrency wallet, 0x5ac . This is the first large-scale Ethereum transfer since April 4, 2024, when the United States transferred 4,567 Ethereum worth $15.2 million. Despite this activity, the United States still holds 49,320 Ethereum worth $172 million.
The total value of recent transactions between the two governments amounts to $106.45 million. This government move has sparked discussion about potential market effects. Although these individual transactions may not have a direct impact on prices, continued government selling could put downward pressure on the market.
Crypto analyst Edo Farina speculated that “the government clearly knows something.”
This speculation suggests that insider insight may be driving this behavior.
Nonetheless, the cryptocurrency community is expecting a strong July. Coinclass's past data supports this, showing that Bitcoin, which fell nearly 7% from $67,540 to $62,772 in June of this year, rebounded significantly in July.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Moreover, the ongoing Mt. Gox crisis is adding another layer of complexity to the market. Last week's announcement that Mt. Gox would begin redeeming Bitcoin and Bitcoin Cash (BCH) from July 2024 is expected to trigger a sell-off and impact market prices.
Cryptocurrency influencer Ajay Kashyap said , “Bitcoin tends to be strong in July, but Mt. Gox is weighing expectations of a rebound.”
