The German Government Has Sold off All Bitcoins – Market Info
Over the past two weeks, the total market capitalisation exceeded €2.19 trillion. The increase in market capitalisation over a 14-day period is 10.6%. The price of Bitcoin has risen by 10.88 % over the last 14 days to a current value of over €59,100. Bitcoin’s dominance is currently around 54.94%.
Source: Coinmarketcap
The German Government Has Sold off All Bitcoins
After several weeks of gradual divestment, the German government seems to have finally gotten rid of all its bitcoin reserves. According to data from the Arkham Intelligence platform, the German government made a final transfer of 3,846 bitcoins to crypto exchanges on July 12, bringing the German government’s bitcoin reserves to zero.
Most of the 50,000 bitcoins sold by the German government in the last month were the result of seizures of assets related to illegal activity dating back to 2013. It was these divestments that were very likely responsible for Bitcoin’s temporary plunge below the $60-thousand level – which is now a thing of the past, as Bitcoin climbed back above $65-thousand during the course of this week.
Source: Arkham Intelligence
However, it is very interesting to see how the German sell-off has affected spot ETFs. It was during the last few days of the sell-offs, when the pace of the sell-offs picked up significantly, that we saw massive inflows into US spot bitcoin ETFs. Spot ETF funds had their 5th best week in terms of capital inflows last week, which means investors were actively buying bitcoins being divested by the German government. In addition, a report by Cryptoquant pointed out that in the price slump, so-called “whales” also accumulated in a big way, increasing their Bitcoin holdings at the fastest monthly pace since April 2023. Source
The Mt.Gox Wallet Has Started Moving Bitcoins
On Tuesday, a wallet linked to the redistribution of bitcoins from the Mt.Gox crypto exchange hack (2014) moved as much as 140,000 bitcoins totalling nearly $9 billion to three different addresses within three hours.
According to data from the Arkham Intelligence platform, Mt.Gox still holds 138,985 bitcoins worth around $8.7 billion in its main wallet. In two transactions on Tuesday, nearly 96,000 BTC worth more than $6 billion was moved to two unknown wallets, while 44,527 BTC was sent to an identified cold wallet belonging to Mt.Gox.
Earlier this month, Mt.Gox announced that it would gradually begin repaying its obligations to investors in the form of redistributions of Bitcoin (BTC) and Bitcoin Cash (BCH) cryptocurrencies to its creditors, with repayments to be made to rehabilitating creditors through designated cryptocurrency exchanges. The Repayment Commitment Statement also stated that the lenders will receive their funds as soon as they meet the necessary conditions. It is expected that the compensation of clients affected by the Mt.Gox crypto exchange hack could begin as early as the end of July.
Also on Tuesday, information was released that cryptocurrency exchange Kraken has accepted funds from creditors of crypto exchange Mt.Gox. This suggests that the settlement of creditors who have been waiting for more than 10 years for their bitcoins is slowly but surely coming to a final conclusion.
However, analysts are optimistic despite the possible selling pressure. In particular, many point to the fact that the market has faced sell-offs by the German government over the past few weeks and has dealt with those sell-offs without too much trouble. And since in this case, it will not be a direct sale but a redistribution of bitcoins, it will be up to the lenders themselves whether they will get their bitcoins or hold on to them in their wallets once they have acquired them. Source
Ethereum ETF as Early as July 23rd?
According to preliminary information from three sources close to the matter, the U.S. Securities and Exchange Commission (SEC) has granted preliminary approval to at least three of the eight asset managers seeking to launch spot ETFs for the cryptocurrency Ethereum. According to the information, the spot ETFs could begin trading as early as next Tuesday.
The approval of spot ETFs on Ethereum depends mainly on the applicants to launch funds of this kind, who are currently submitting the final versions of their applications to the SEC. One source close to the matter even said that all eight funds should be launched simultaneously. However, an SEC spokesman told Reuters that the agency would not comment on the Form S-1 approval process or comment on individual applications.
Following the launch of nine Bitcoin spot ETFs in the United States, the launch of a similar product on the cryptocurrency Ethereum would mark another big win for the entire crypto industry, which is slowly but surely making its way into the mainstream. Ethereum is currently the second-largest cryptocurrency in the world, with a market capitalization of up to $382 billion.
Some of the most prominent applicants for spot ETFs include BlackRock, VanEck and Franklin Templeton, which could get the green light as early as next Monday, according to sources, with trading of these funds starting the following trading day. Source
BlackRock’s CEO Was Wrong About Bitcoin
Larry Fink, CEO of BlackRock, the world’s largest asset management company, stated during his apprenticeship on CNBC’s Squawk On The Street that he has been wrong about Bitcoin in the past, leading him to go from a Bitcoin sceptic to a “Bitcoin bull.”
“As you know, I was a sceptic. I was a proud sceptic. And I studied it, learned about it, and I came away saying ‘Ok, my opinion of five years was wrong, and here’s my opinion today.’ This is what I believe in today, I believe in the opportunity, I believe Bitcoin is legitimate,” stated Fink by answering a question from Jim Cramer, one of the show’s hosts.
In addition, Fink said he was not trying to say that there are no risks and scams associated with Bitcoin. What he is trying to say is that Bitcoin is a legitimate financial instrument that allows people to make returns that are quite different from the rest of the traditional market.
“It is an instrument that you invest when you are more frightened, it is an instrument when you believe that countries are debasing their currencies by the excess of deficit, and some countries are. I believe we have countries where you are frightened of your everyday existence, and if you have an opportunity to invest in something that is outside your country’s control, then you can have more financial control,” said Fink.
In addition, Fink shared his belief that bitcoin is one of the asset classes that everyone is currently looking at, twice emphasizing that he views bitcoin as “digital gold,” even mentioning that bitcoin has a number of practical use cases as well.
Larry Fink and his company Blackrock have been instrumental in the approval of both Bitcoin and Ethereum ETFs. Despite the efforts of many well-known players in the world of finance over the last decade, it was only the entry of BlackRock, the largest asset manager in the world, that was the final and most important push needed to get the SEC to approve these ETFs. Source
FTX and CFTC Reach Agreement
The bankrupt cryptocurrency exchange FTX and the U.S. Commodity Futures Trading Commission (CFTC) have reached a settlement agreement totalling $12.7 billion, which is currently awaiting approval from a Delaware judge. If the agreement is approved, the entire $12.7 billion will be allocated to pay creditors of the FTX crypto exchange, as the CFTC has decided to waive its civil monetary penalty requirement.
The lawsuit, filed by the CFTC in December 2022, accused the FTX crypto exchange, its former CEO Sam Bankman-Fried, and its sister firm Alameda Research of fraud and misrepresentation. The CFTC said in the lawsuit that the two companies caused losses to clients amounting to $8 billion through their actions.
The agreement reached by the two entities as recently as last Friday also states that the CFTC will waive penalties and not claim any funds if FTX complies with its reorganization plan, which will allow it to distribute up to $12.7 billion to its creditors, depending on available funds. In doing so, the CFTC has waived its own enforcement action against FTX to improve the position of the crypto exchange’s customers and creditors.
A settlement hearing is scheduled for August 6 in the Bankruptcy Court for the District of Delaware. FTX’s plan of reorganization aims to achieve a 118% recovery for 98% of creditors with claims under $50,000 based on asset prices at the time of FTX’s bankruptcy filing in November 2022. However, some creditors have opposed the deal, citing that the payout should reflect the current value of cryptocurrencies, which have increased 166% since the bankruptcy filing. The judge in this case has until October 7, 2024, to render a final judgment. Source
Inflation in the US at a Long-Term Low
U.S. inflation as measured by the Consumer Price Index (CPI) fell to 3% year-on-year in June from 3.3% in May. This figure was better than analysts’ estimates, who had expected annual inflation to be 3.1%.
The Core CPI – the index that excludes food and energy costs – performed similarly well, rising by 0.1% in June against expectations of 0.2%, and rising by 3.3% y-o-y against forecasts of 3.4%. These results confirm that inflation in the United States is slowly on the wane, opening the door to interest rate cuts.
Source: Reuters
The Consumer Price Index fell 0.1% last month, the first decline since June 2023, after being unchanged in May, the Labor Department’s Bureau of Labor Statistics said. The CPI was heavily influenced by a 3.8% drop in gasoline prices, which followed a 3.6% decline in May. Food prices rose 0.2% after a slight 0.1% increase in May. Grocery store prices rose by 0.1%, with price increases for dairy products, meat, fish and eggs offset by price decreases for fruit and vegetables as well as cereals.
As interest rates in the U.S. have risen, the country’s economic growth has also slowed, with GDP in the second quarter forecast to be close to the 1.8% annualized rate that policymakers consider to be a non-inflationary growth rate. Fed Chairman Jerome Powell acknowledged the improving trend in price pressures but said in a statement this week that he was not yet ready to declare inflation a loser and that he needed more data to bolster his conviction to cut interest rates. Source
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