With over 2.2% of Bitcoin’s supply held by governments and the Mt. Gox reimbursement still ongoing, the market might face further selling pressure.
The crypto market has faced immense selling pressure recently as large Bitcoin holders have sold part of their stash.
From the German government’s 50,000 BTC sales to Mt. Gox redistributing over $6 billion worth of Bitcoin to creditors, these notable dumps have impacted the market.
However, further liquidation is not off the grid yet, as analysis shows fresh sources that could create another round of selling pressure.
Data from Kaiko shows possible sources of another supply overhang and its implications for Bitcoin and the broader crypto market.
Possible Sources of Asset Liquidation
Per Kaiko, wallets tied to governments still pose significant risks of another supply overhang. Despite the German government’s exhaustion, the US, UK, China, and Ukraine still have more than 2.2% of Bitcoin’s supply.
Although the US government has periodically dumped some of its stash, its wallet still contains the highest amount of Bitcoin for any governmental body. The US government’s wallet cradles 203,239 BTC, valued at $12 billion.
The Chinese government also holds weighty amounts of Bitcoin, with its wallet containing 190,000 BTC seized from the Plustoken scam in 2019. Although the country has not moved any of the bitcoins since then, they are a possible source of selling pressure.
Ukraine and the United Kingdom hold a combined 107,550 BTCs. An attempt to dissolve these stashes could create a substantial supply overhang in the already weakened crypto market.
Mt. Gox Redistribution Still Ongoing
Despite most of the funds already liquidated, the defunct Mt. Gox will redistribute 44,899 BTC (worth $2.62 billion) to the remaining creditors. The exchange has distributed over $6 billion since July.
Elon Musk’s Tesla is also a potential source of selling pressure. The electric automotive firm has held 9,720 BTC since 2022 and may be looking to cash in on gains.
Notably, Bitcoin has withstood asset liquidation worth over $9 billion since June and has only corrected 13.7% from its price at the start of June and 20% from its all-time high. Bitcoin traded at $58,286 at the time of writing.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
