Bitcoin (BTC) experienced a 4.5% increase from June 28 to July 1, breaking through the $63,000 resistance level for the first time in a week. The previous decline was primarily caused by concerns surrounding the German government’s BTC transactions with exchanges and worries about Mt. Gox creditors selling large amounts of Bitcoin during bankruptcy proceedings. However, three key factors, including the potential entry of a major new investor into the market, helped reverse this bearish trend.
On July 1, the German government transferred 1,500 BTC, valued at $95 million, to various cryptocurrency exchanges, as reported by onchain analytics firm Arkham Intelligence. Similarly, the United States government moved 1,184 BTC on June 30 from a wallet linked to previously confiscated funds. Currently, the German government holds Bitcoin assets worth $2.8 billion, mostly acquired from a defunct movie piracy site that was shut down in 2013.
These transactions fueled speculation that selling pressure might persist, as the U.S. government’s wallet also contains Bitcoin valued at $13.4 billion, according to data from Arkham Intelligence. The most significant recent transaction by the U.S. government occurred on June 26, when it sent 3,940 BTC, worth $214 million at the time, to a Coinbase Prime account. These funds were confiscated from Banmeet Singh, a convicted drug trafficker, earlier in 2024.
Despite government sales exceeding $300 million, Bitcoin’s price demonstrated resilience. This resilience was further strengthened as spot Bitcoin exchange-traded funds (ETFs) absorbed part of the supply, adding a net $137 million in just four trading days from June 25 to June 28. Additionally, the growing instability in traditional markets and the entrance of significant new players into the Bitcoin ecosystem have bolstered investor confidence.
Billionaire Michael Dell, founder and CEO of Dell Technologies, sparked excitement on June 21 with a suggestive message about a possible Bitcoin investment. Dell, listed by Forbes as one of the 20 richest people in the world, posted a meme featuring the Cookie Monster holding Bitcoin-shaped cookies. Analyst Joe Consorti highlighted that Dell’s company has $5.83 billion in cash and equivalents.
On July 1, Tokyo-based subsidiary Amber Japan changed its name to S.BLOX to focus on cryptocurrency trading. The firm aims to enhance user-friendliness and expand its features. As a member of the Japan Virtual Currency Exchange Association (JVCEA), S.BLOX has $10.5 billion in capital based on the latest financial reports. Sony Corporation, its parent company, had $11.8 billion in cash and equivalents as of March 2024.
Improved outlook on Bitcoin from some investors is driven by concerns that tech stocks in the U.S. have reached excessively high valuations, with sales expectations for the second quarter potentially falling short. A study by Charlie Bilello from Creative Planning showed a “super steep” forward sales estimate of 21 times for Nvidia, a significant increase from 12 times just two months earlier. In comparison, Microsoft trades at 12 times forward sales and Apple at eight times.
Analysts also anticipate a 3.7% decline in Tesla’s second-quarter sales due to intense competition in China and sluggish demand for affordable new models. Tesla’s stock has fallen 15.5% since the beginning of the year. This dissatisfaction with the valuations of traditional market assets, such as stocks and real estate, is contributing to the rising demand for Bitcoin.
The fear, uncertainty, and doubt surrounding U.S. and German government Bitcoin transactions have subsided, paving the way for a rally above $63,000. It is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any investment or trading decisions.