Concerns Over US Government Selling Bitcoin as Bullish Statistics Surface
In a recent video titled "U.S. GOVERNMENT MOVING $300 MILLION OF BITCOIN! RUN ON CRYPTO IS STARTING!" by Merlin, concerns were raised about the US government selling millions of dollars worth of Bitcoin and the potential impact on the cryptocurrency's price. However, alongside these concerns, several bullish statistics were shared, including lower-than-expected CPI and PPI data, which have positive implications for the overall stock market.
The video highlights that despite the US government's sale of Bitcoin, the cryptocurrency's price has remained stable. Additionally, the lower-than-expected CPI and PPI data indicate lower inflation, contributing to the positive sentiment in the stock market. It is noted that if inflation continues to decrease, the Federal Reserve may not need to maintain high interest rates for an extended period.
Regarding the US government's sale of seized Bitcoin worth $300 million, there are mixed sentiments. The announcement of the sale, involving approximately 41,500 Bitcoin seized from the Silk Road hacker James Zong, has raised concerns about a potential negative impact on the cryptocurrency market. However, delays in transferring the Bitcoin due to insufficient funds for transaction fees have somewhat mitigated these concerns.
The video speculates on the US government's handling of Bitcoin, suggesting that they may sell the cryptocurrency obtained from hacks rather than holding it. It is proposed that the government could be quietly holding some Bitcoin while selling the acquired portion. The government's selling strategy, including the possibility of over-the-counter transactions, is discussed.
The depletion of Bitcoin on exchanges and low collateral are identified as risks that could lead to a bank run. Exchanges such as BlackRock and Coinbase are experiencing significant decreases in their crypto holdings, and Huobi's BTC collateral has reached alarmingly low levels. The diminishing balances on exchanges indicate a growing demand for Bitcoin, potentially allowing the US government to acquire Bitcoin directly.
The video also touches on the profitability of Bitcoin mining, noting that rewards are not currently commensurate with the effort involved. This has led some individuals to turn to self-custody of Bitcoin due to unreliable exchanges. However, the crossing of the Bitcoin price above the 200-day moving average could signal a return to a bull market.
The future of Bitcoin remains uncertain, with predictions ranging from a crash to a pump in 2023. Standard Charter predicts a crash to $5,000 by the end of 2022, followed by a pump to over $120,000 in 2023. On the other hand, BlackRock's Larry Fink sees potential for Bitcoin to revolutionize finance, and banks are increasingly showing interest in the cryptocurrency market. The Department of Justice's potential sale of cryptocurrency is also mentioned as a factor that could affect the market.
Despite positive CPI news, the video highlights that the crypto market is not experiencing a significant upward movement, while the traditional market appears favorable. Movement of crypto assets is observed, although the reasons behind it remain unknown, adding to the unpredictability of the cryptocurrency market.
In summary, while concerns arise from the US government's sale of Bitcoin, the presence of bullish statistics such as lower inflation and positive stock market indicators provide a balanced perspective on the cryptocurrency's future. The market dynamics and potential impact of institutional activities continue to shape the landscape of Bitcoin and the wider crypto market.