Despite numerous sellers, Bitcoin has remained profitable this year, up nearly 30% year-to-date.
Bitcoin has had a busy year, full of ups and downs. However, an investor who bought the asset at the beginning of the year would have made almost 30% profit on their investment.
Bitcoin fell in August for several reasons, with pressure from large Bitcoin holders being a major factor. Selling by the German and US governments, Mt. Gox distributions to creditors, and the Japanese yen carry trade all contributed significantly to Bitcoin’s poor performance.
Sustainable Bitcoin
The German government has begun dumping bitcoins seized from Movie2K, an online movie piracy platform. According to reports, the German Federal Criminal Police Office (KBA) has seized 50,000 BTC from the scam project.
In June, a network wallet linked to the German government was launched. started selling bitcoinscontinually dumping them on the open market. Within a few weeks, they sold all 5,000 BTC, causing panic in the crypto market and affecting the price of Bitcoin.
While the German government was selling, its American counterpart joined the revelry and began selling its Bitcoin holdings. Earlier report showed that the country’s online wallet sent 10,000 BTC ($593 million) to Coinbase Prime for sale after sending 3,940 BTC ($240 million) to the same exchange in late June.
To add to the FUD, Mt. Gox started to refund bitcoins worth $9 billion to its creditors. The defunct exchange distributed more than $7 billion worth of bitcoin to users affected by its closure and currently holds 44,899 BTC ($2.68 billion).
Other macroeconomic indicators, such as the rebound effect of the Japanese yen carry trade, also weighed on risk assets like Bitcoin, causing further sell-offs. Notably, Bitcoin has weathered all this selling pressure, correcting only 18.5% from its all-time high and 16% from its price in early June.
What’s Next for Bitcoin
With the macroeconomics improving, Bitcoin is likely to rise soon. Federal Reserve Chairman Jerome Powell recently said it was time to cut rates. If the federal agency cuts interest rates in September, risk assets like Bitcoin could rise significantly.
Additionally, the fourth quarter of the year was one of the best performing periods for Bitcoin. Bitcoin has historically risen towards the end of the year, with the asset rising by 3.91%, 28.52%, 8.81%, and 12.18% in September, October, November, and December 2023.
