OTC Markets Gain Favor Amid Government Bitcoin Transactions

OTC Markets Gain Favor Amid Government Bitcoin Transactions

In recent events, Germany has been directly involved in purchasing and selling large volumes of Bitcoin in the market. At the beginning of their activities, they preferred exchange transactions, whereas, at present, there is a tendency towards OTC operations. This action is consistent with their approach to lowering market effects, a trend commonly seen in institutions.

Bitcoin Market Stabilizes as Germany Shifts Tactics

In the initial phase of the German government’s decision to sell Bitcoin, it adopted the strategy of using exchanges, which caused some market disturbances. They transferred a pretty good number of 19,521. 7 BTC, equal to around $1.14 billion, to entities believed to be engaged in the OTC market. This action led to a marked decline in the price of Bitcoin, and one can see this when Bitcoin dipped below $54,000 on July 5. Then, the government purchased 7,106 bitcoins from the CETI at a lower price and thus held 27,461 BTC worth about $1. 55 billion.

We can observe the pattern of transactions that indicate a strategic switch to OTC sales to reduce the impact on Bitcoin’s market price. Spot On Chain team pointed to the government transaction method as a probable cause of Bitcoin’s market stability. As a result, the German authorities are changing their tactics and have started to work with market makers such as B2C2, Flow Traders, and Cumberland. This transition seeks to accomplish painless sales processes that do not disturb other market parts.

Bitcoin Price Could Reach $100K in 2024

Nevertheless, these are significant transactions, though they are a drop in the bucket compared to the daily turnover of $36 billion. However, they have overshot market perception and, as a result, have caused panic and increased volatility among investors.

Based on the analysis, Spot On Chain applied Vertex AI to predict the price of Bitcoin, which will range between $56,000 and $70,000 in the near future. The analytics platform is still fairly bullish on the asset and gave a 63% chance that BTC will be trading at $100,000 by the second half of 2024.

The bullish forecast is underpinned by the Federal Open Market Committee’s decision to trim rates in December 2023 as the driving force. Lower interest rates often make investments with higher risks more attractive, making cryptocurrencies more beautiful. Based on this analysis, by 2025, Bitcoin could trade above $150,000 thanks to the continuous monetary policy changes and increasing investors’ trust in the cryptocurrency as an invaluable asset.


Also Read: German Government Moves 6.3k Bitcoin; Holds $1.3B Worth BTC

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Published at Tue, 09 Jul 2024 16:27:04 +0200

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