Bitrabo Editorial
Recent developments in the digital currency market have seen Bitcoin facing significant downward pressure. On July 4, the value of Bitcoin dropped below $60,000, hitting a low of $57,000.
The decline continued on the following day, with Bitcoin falling below $54,000 at one point. Several factors have been linked to this negative trend, including government sell-offs and potential selling following news of the Mt. Gox reimbursement.
Government Bitcoin Sales Misconception: Insights from CryptoQuant CEO
In a recent analysis on the X platform, CEO and founder of CryptoQuant, Ki Young Ju, shared thoughts on reports of various governments selling seized Bitcoin assets. The German government, in particular, has been involved in significant Bitcoin transactions in recent weeks.
The fear and uncertainty stemming from these sell-offs are believed to be key contributors to Bitcoin’s current downward trajectory. However, the CryptoQuant CEO suggests that the impact of the government’s sale of seized BTC assets may be exaggerated.
Based on Bitcoin’s realized cap over the past year, only a small percentage of the total capital inflow ($224 billion) – specifically $9 billion (less than 5%) – is from government-seized BTC. It’s important to note that this data reflects Bitcoin seized by the United States and German governments.
Ki Young Ju pointed out that the realized cap represents the total capital inflow since 2023, differing from the conventional market cap by being based on the coin’s last movement price.
In a recent X post, the CEO reaffirmed confidence in Bitcoin’s long-term prospects, indicating that the bull cycle is not yet complete and is likely to continue into early next year.
Furthermore, using the realized cap metric, Young Ju predicts that Bitcoin’s peak in this cycle could reach around $112,000.
Bitcoin Price Overview
Bitcoin’s price rose above $56,000 towards the end of July 5 and is currently trading at $56,400. Nonetheless, the leading digital currency remains down by nearly 6% over the past week.
Image credit: iStock, chart source: TradingView