Key Points
- Germany transferred 700 Bitcoin, sparking market uncertainty due to the unmarked receiving address.
- Correlation between Bitcoin and traditional investments declined, with Bitcoin price movements becoming more independent.
The German government recently transferred 700 Bitcoin (BTC), as reported by blockchain data analysis firm Arkham. This move caused some unease in the crypto market due to the destination being an unmarked address.
Germany’s Bitcoin Move
The transaction, worth roughly $40.55 million, has raised questions regarding its purpose. The receiving address could be linked to a financial institution or an over-the-counter (OTC) service that caters to large investors trading substantial volumes of cryptocurrency.
Germany currently holds about 39,826 BTC, valued at approximately $2.31 billion. This significant holding indicates a potential long-term strategy for the German government concerning cryptocurrency. The mystery surrounding the recent transfer has led to speculation of a possible large sell-off by the German government, which could cause investors to unload their holdings to avoid a potential price drop.
Decline in Correlation
Simultaneously, the correlation between Bitcoin and traditional stock markets has significantly weakened. This shift means that Bitcoin’s price movements are becoming less dependent on the fluctuations of equities, a stark contrast to previous years. This decline in correlation is the strongest it has been in over four and a half years.
Analyst Will Clemente suggests this could be due to an excess supply of Bitcoin in the market. This oversupply is believed to come from various sources, including Germany, the United States, and Mt. Gox, a now-defunct Bitcoin exchange. This excess supply is exerting downward pressure on Bitcoin’s price, independent of the stock market’s performance.
At the time of writing, BTC was trading at $57,482.70, with a 1.42% increase in the last 24 hours. However, the volume of BTC traded had declined by 47.14% during the same period.
