Coin World News Report:
The oversupply from Mt. Gox and government entities has exacerbated market sentiment. The founder of Tron has proposed purchasing the BTC shares held by the German government to reduce negative market impact.
On July 4th, as Mt. Gox prepared and tested transactions to begin distributing approximately $8 billion worth of Bitcoin (BTC), the cryptocurrency market experienced a sharp decline.
Despite the looming threat from Mt. Gox, the German government continued to sell its BTC holdings. On July 4th, it transferred 3,000 bitcoins but dumped 13,000 bitcoins worth over $78 million to Bitstamp, Coinbase, and Kraken, further disrupting the market.
Amidst the subsequent market turmoil, Justin Sun, the founder of Tron, proposed buying all the German government’s BTC from the market to minimize the impact.
“I am willing to negotiate with the German government to privately purchase all the BTC in order to minimize the impact on the market.”
German Bitcoin holdings and market reaction
According to data from Arkham Intelligence, the German government still holds 4,030 BTC worth $2.3 billion that needs to be sold. However, it remains unclear whether Sun’s proposal is legitimate or a typical prank.
Nevertheless, even if Sun’s offer were to be fulfilled, it may not effectively alleviate the current market downturn. In addition to the German government, three other BTC whales dumped their holdings on July 4th, dragging BTC down to $57,000.
Spot On Chain data shows that the US government also transferred $1.367 million worth of BTC but still holds $12.3 billion.
Furthermore, two unmarked whale wallets dumped over 45,000 BTC worth nearly $270 million, further intensifying the selling pressure.
Cryptocurrency market commentator Samson Mow criticized the decisions of the German and US governments to sell Bitcoin directly to exchanges.
“Imagine selling the hardest form of currency ever… and then imagine selling it on an exchange with market orders, driving down the price, so you get less.”
The drop to $57,000 levels resulted in over 65% of BTC addresses experiencing losses, especially for users who purchased between $48,600 and $659,000.
Additionally, the prolonged selling liquidated BTC positions worth $113 million, and in the past 24 hours, long positions have suffered nearly $100 million in re-ignition impacts.