On Friday afternoon, the German government’s efforts to empty its bitcoin wallets of billions of dollars in assets seized from criminals reached its conclusion, with the wallets now holding zero digital assets, according to new data from blockchain analytics firm Arkham Intelligence.
Over the past month, the wallet transfers sparked intense fear in the crypto community that the price of bitcoin, the world’s largest cryptocurrency, would slide as a result of the German government’s large sell-offs.
Instead, bitcoin’s price rose 3%. At the time of writing, bitcoin’s price is now valued at more than $58,000, representing a 1% jump in the last 24 hours.
In June, the German government’s bitcoin wallets contained nearly $3.4 billion in bitcoin, but Berlin has been working aggressively to liquidate its seized assets. Earlier this month, the Federal Criminal Police Office of Germany, known as the Bundeskriminalamt (BKA), offloaded $2.8 billion in bitcoin, or 50,000 bitcoin.
The government transferred funds to major crypto exchanges in the U.S. and Europe like Coinbase, Bitstamp, and Kraken.
Market watchers of the German government’s sell-off have closely tracked the bitcoin wallet transfers and noted that some of the government’s transfers have been returned to the German government’s wallet addresses, indicating that the BKA was simply gauging liquidity before offloading assets.
On Thursday, crypto’s “Fear and Greed” index plunged to “extreme fear” on the back of German government’s transfers, but those jitters were quickly alleviated when the sell-offs were completed. In fact, some analysis points to the fact that elevated levels of investor anxiety may present prime opportunities to buy bitcoin.
“One of the best metrics for identifying optimal entry points in a bull market is when short-term bitcoin holders sell at a loss and the fear index is ridiculously high (which has been happening in recent weeks),” noted a CryptoQuant analyst. “In contrast, previous market peaks have been signaled by long-term holders taking significant profits over numerous months, which hasn’t happened yet.”
