A German parliament member, Joana Cotar, has criticized the government’s decision to sell seized bitcoin on a large scale, advocating for the cryptocurrency’s use as a strategic reserve. She invited key political figures, including Chancellor Olaf Scholz, to a lecture on bitcoin’s advantages for nation-states, aiming to shift policy toward embracing cryptocurrency as a reserve […]
Bitcoin News
German Parliament Member Urges Government To Cease Selling Bitcoin
Joana Cotar, an independent member of the Bundestag, one of Germany’s legislative chambers, has called on the government to stop the ongoing Bitcoin (BTC) sell-off, which has had a notable impact on the BTC market, resulting in a 10% drop in the cryptocurrency’s price over the past two weeks.
Bitcoin As Valuable Asset Class For State Treasury
In a letter addressed to the government, Cotar emphasized that BTC has gained recognition as a genuine asset class and a promising investment for the future due to its remarkable price surge.
The lawmaker highlighted that traditional financial institutions now view Bitcoin as a real asset with properties similar to “digital gold,” making it suitable for the state treasury.
Cotar pointed out that governments worldwide are reevaluating Bitcoin to foster innovation within the ecosystem or enforce stricter regulations on Bitcoin ownership and transactions. However, she acknowledged that understanding the benefits of Bitcoin can be challenging for individuals, and the same applies to governments and politicians.
Cotar underscored that a well-designed Bitcoin strategy has the potential to reshape a country’s development, foster economic prosperity, and safeguard fundamental human freedoms for all citizens. As BTC continues to gain acceptance globally, she believes more nations will consider integrating it into their financial and economic systems.
Interestingly, Cotar outlined several advantages for the German government in retaining its Bitcoin holdings instead of selling them.
BTC Strategy For Germany
Firstly, including Bitcoin in the treasury alongside traditional fiat currencies and gold reserves diversifies a nation’s assets, reducing risks associated with overexposure to a single asset class.
Second, the lawmaker highlighted Bitcoin’s scarcity and deflationary nature, which makes it an attractive alternative for wealth preservation. By holding Bitcoin as part of the national treasury, Cotar believes that the government can protect national reserves from inflation and currency devaluation beyond its control.
Furthermore, Cotar highlighted that including Bitcoin in the treasury can enhance overall portfolio performance, as various studies have shown that Bitcoin’s risk-adjusted returns surpass those of traditional investments like stocks and bonds over the long term.
Cotar, who has long been a proponent of making Bitcoin legal tender in Germany through appropriate legislation, further argued that developing a favorable regulatory framework for all Bitcoin-related activities can open doors for new businesses and technological progress while paving the way for further economic development in the country.
Cotar concluded by emphasizing that a Bitcoin-friendly legal framework will promote research and development in the financial and technology sectors, attract top talent, and foster collaboration between private companies, government institutions, and the scientific community.
Sell-Off Continues, Putting Pressure On BTC Price
It is worth noting that the German government sold another batch of confiscated BTC worth over 5 million on Thursday. According to data from market intelligence platform Arkham, the German authorities still hold 40,359 BTC worth approximately .3 billion.
This, along with the US government selling off its Bitcoin holdings, caused BTC to fall as low as ,700 on Thursday. However, the largest cryptocurrency in the market, which has seen a 17% price drop in the monthly time frame, has recovered to its current price level of ,300.
Featured image from DALL-E, chart from TradingView.com
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Bitcoin Analyst Set Sight On $79,591: Urges Traders To Be Patient
While Bitcoin prices hover around 15% below their all-time highs, with some skeptics predicting more losses, one analyst on X expects the coin to bounce strongly, even breaking above all-time highs.
Taking to X, the trader argues that Bitcoin has yet to breach the Golden Ratio Multiplier’s Cycle Top, currently sitting at ,591. Supposedly, the analyst continues, this target price increases the longer it remains unchallenged.
Bitcoin Traders Need To Be Patient
So far, BTC is trending lower and is technically within a bear breakout formation following sharp losses on April 13. As the coin struggles for gains and is boxed inside the bear bar, the odds of further upswings like those registered in Q1 2024 remain muted.
However, even as BTC bulls are muted, the analyst emphasizes the prices are “respecting data points” despite prices dumping lower and taking longer to break higher.
Most traders expect prices to rise higher following March 2024’s impressive surge. However, the analyst believes traders need to have patience.
Looking at how BTCUSDT prices are unfolding, it is clear that momentum is fading, and participation is low. CoinMarketCap data shows that trading volume on the last day is flat, at billion.
Overall, trading volume–a measure of engagement and trader interest– has dropped since mid-March, when the coin soared to all-time highs of approximately ,000.
Whales Are Keeping Off From The Market
Parallel data from IntoTheBlock reveals that addresses holding at least 0.1% have also been slowing down in their accumulation, making the drop even more severe.
According to a CoinDesk report, when BTC fell on March 19, prices bounced strongly on March 20 following aggressive buying pressure whales. IntoTheBlock data showed they bought 80,000 BTC, forcing prices back to over ,000.
Technically, by tracking whale movements, traders and investors can gauge overall market sentiment and their confidence for gains. This, in turn, could impact the sustainability of trends.
Their heavy involvement could precede sharp price gains, lifting the broader crypto markets. The fact that whales appear to be keeping off could suggest that they expect prices to drop even more.
Moreover, other factors, such as the pace of inflows into spot Bitcoin exchange-traded funds (ETFs), point to a bleak future. CryptoQuant data shows that inflows have been stagnant in the past trading week. At the same time, IBIT, the spot BTC ETF offered by BlackRock, has been the only product out of the eight registering inflows.