Key Points
- The German government is potentially shifting towards Bitcoin OTC sales, as indicated by Spot On Chain.
- Spot On Chain’s Bitcoin price predictions suggest a bullish trend in the second half of 2024.
The on-chain analytics platform, Spot On Chain, has noted significant Bitcoin transactions by the German government. This has sparked conversations about a possible move towards over-the-counter (OTC) sales.
A report reveals that the German government transferred 19,521.7 BTC, equivalent to $1.14 billion, to wallets likely owned by market makers B2C2, Flow Traders, and Cumberland. This transfer could indicate a potential OTC transaction. Afterward, they received 7,106 BTC ($412 million) back, primarily from centralized exchanges (CEXs) at a lower price. This suggests a possible strategic shift. Currently, the German government holds 27,461 BTC ($1.55 billion), having liquidated almost half of the Bitcoin holdings initially planned for sale.
Impact on Market and Bitcoin Price Decline
Large institutions usually prefer OTC trading to minimize market impact. However, the German government chose exchanges, causing significant market turbulence and price drops. Spot On Chain suggests that the German government might now be recognizing the disadvantages of this approach and shifting focus to OTC sales directly to market makers.
Since June, the decline in Bitcoin’s price has been partly attributed to the German government’s sale of around $2 billion worth of Bitcoin seized from Movie2k.to operators. This sell-off began on June 18, 2024. On July 5, Bitcoin’s price dropped below the critical $54,000 support level but has since recovered to $57,683.
Despite the German government’s transactions being relatively small compared to Bitcoin’s daily trading volume of $36 billion, they have significantly influenced market sentiment. Frequent news reports on these movements have increased market anxiety, potentially affecting prices as market makers react to the information.
Bitcoin Price Predictions by Spot On Chain
Spot On Chain has recently revealed their Bitcoin price predictions, utilizing Vertex AI from Google Cloud for advanced modeling. In the short term, from May to July 2024, Bitcoin’s price is expected to fluctuate between $56,000 and $70,000. This period is likely to be marked by potential volatility, with a significant 48% probability of prices falling below $60,000.
Looking forward to the second half of 2024, Spot On Chain anticipates a bullish trend, forecasting a 63% likelihood of Bitcoin reaching $100,000. This positive outlook is reinforced by expected rate cuts initiated by the Federal Open Market Committee (FOMC) in December 2023, aiming to lower the federal funds rate to 4.6%. Such adjustments in monetary policy are expected to boost demand for high-risk assets like Bitcoin.
Moving into the first half of 2025, Spot On Chain predicts a strong probability (42%) of Bitcoin surpassing the $150,000 threshold. This likelihood increases to 70% for the entire year. These projections highlight a favorable long-term outlook, backed by evolving market trends and investor confidence in Bitcoin’s role as a valuable asset class.
