Despite multiple selling pressures, Bitcoin has remained profitable this year, recording a gain of almost 30% since the beginning of the year.
Bitcoin has had an eventful year full of ups and downs. Nevertheless, an investor who had purchased the asset at the beginning of the year would have made almost a 30% return on their investment.
The Bitcoin price fell in August for several reasons, and selling pressure from large Bitcoin holders was a major factor. Sales by the German and American governments, Mt. Gox’s distributions to creditors, and the Japanese yen carry trade all contributed significantly to the poor performance of the Bitcoin price.
Resilient Bitcoin
The German government has started selling bitcoins from the online movie piracy platform Movie2K. According to reports, the Federal Criminal Police Office (KBA) has seized 50,000 BTC from the scam project.
In June, the on-chain wallet tied to the German government started selling Bitcoinsand dumped them on the open market incessantly. Within a few weeks, they sold all 5,000 BTC, causing panic in the crypto market and affecting the Bitcoin price.
While the German government was selling, the US government joined the selling frenzy and began selling its Bitcoin stockpiles. An earlier report showed that the country’s on-chain wallet sent 10,000 BTC ($593 million) to Coinbase Prime for sale after sending 3,940 BTC ($240 million) to the same exchange in late June.
To add to the FUD, Mt. Gox started refunding Bitcoin worth $9 billion to its creditors. The defunct exchange has distributed over $7 billion worth of Bitcoin to users affected by its closure and currently holds 44,899 BTC ($2.68 billion).
Other macroeconomic factors, such as the negative hit from the Japanese yen carry trade, also impacted risk assets like Bitcoin, leading to further sell-offs. Notably, Bitcoin has withstood all this selling pressure, correcting only 18.5% from its all-time high and 16% from its early June price.
What’s next for Bitcoin?
With improving macroeconomic developments, Bitcoin is expected to rise soon. US Federal Reserve (Fed) Chairman Jerome Powell recently said it was time to cut interest rates. If the federal agency cuts interest rates in September, risky assets like Bitcoin could rise significantly.
Also, the fourth quarter of the year was one of the best performing periods for Bitcoin. Historically, Bitcoin has rallied towards the end of the year, with the asset growing by 3.91%, 28.52%, 8.81%, and 12.18% in September, October, November, and December 2023, respectively.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The views expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial loss.