On Friday afternoon, the German government’s efforts to empty billions of dollars of assets seized from criminals from Bitcoin wallets came to an end, with the wallets no longer containing any digital assets, according to new data from blockchain analytics firm Arkham Intelligence.
Last month, wallet transfers sparked intense fears in the crypto community that the price of Bitcoin, the world’s largest cryptocurrency, would plummet as a result of a massive sell-off by the German government.
Instead, the price of bitcoin has increased by 3%. At the time of writing, the price of bitcoin is currently valued at over $58,000, representing a 1% jump in the last 24 hours.
In June, the German government had about $3.4 billion worth of bitcoin in its bitcoin wallets, but Berlin has been working aggressively to liquidate its seized assets. Earlier this month, Germany’s Federal Criminal Police Office, known as the Bundeskriminalamt (BKA), sold $2.8 billion worth of bitcoin, or 50,000 bitcoins.
The government funneled money to major cryptocurrency exchanges in the US and Europe, including Coinbase, Bitstamp, and Kraken.
Market observers of the German government sell-off closely monitored Bitcoin wallet transfers and noted that some of the government’s transfers were sent back to German government wallet addresses, suggesting that the BKA was simply measuring liquidity before selling assets.
On Thursday, the cryptocurrency’s “Fear & Greed” index fell to “extreme fear” due to the German government’s transfers, but those jitters quickly subsided once the sell-off was complete. In fact, some analysis suggests that high levels of investor anxiety could present significant opportunities to buy bitcoin.
“One of the best metrics for identifying optimal entry points in a bull market is when short-term bitcoin holders are selling at a loss and the fear index is ridiculously high (which has been the case in recent weeks),” one CryptoQuant analyst noted. “In contrast, previous market peaks were marked by long-term holders making significant profits for months, which has not happened yet.”