Tue, July 02, 2024 at 09:00

• 

  Kang-hoon

  • Hello, Annie.

  • Today, I have some intriguing news about recent Bitcoin sales by the governments of the United States and Germany.

  • 
• Annie

  • Oh, really?

  • That sounds interesting!😊 Can you tell me more about it?

  
• 

  Kang-hoon

  • Certainly.

  • Last week, the U.S. government sold 3,940 bitcoins, which were worth about $240 million.

  • These bitcoins were seized from a drug trafficker back in 2014.

  • Similarly, the German government sold 900 bitcoins.

• Annie

  • Wow, that's a lot of bitcoins!

  • Why did they decide to sell them now?

  
• ADward

  • Hold on! Behold, an advertisement awaits. Legend has it that clicking on this ad will make the AI server even smarter... 😅

  
• 

  Kang-hoon

  • The article suggests that these sales might be driven by the need to liquidate assets quickly.

  • Historically, the U.S. has been selling seized bitcoins for over a decade through agencies like the FBI, IRS, and DEA.

• Annie

  • I see.

  • But isn't there a risk that such large sales could impact Bitcoin's price?

  
• 

  Kang-hoon

  • Yes, indeed.

  • A massive sell-off could potentially cause a price drop due to the laws of supply and demand.

  • 

  • This is a concern for many in the cryptocurrency community.

• Annie

  • That makes sense.

  • But why don't governments hold onto Bitcoin for the long term, like they do with other assets?

  
• 

  Kang-hoon

  • That's a good question.

  • The article argues that holding Bitcoin long-term could be more rational now, given its performance over the past decade.

  • However, governments have traditionally been cautious with digital assets.

• Annie

  • So, are there any examples of governments holding Bitcoin as part of their reserves?

  
• 

  Kang-hoon

  • Not widely, but there are discussions.

  • For instance, in Switzerland, bitcoin supporters are pushing for a change in the law to allow the central bank to hold bitcoin.

  • However, the head of the central bank has rejected this idea, citing concerns about liquidity and sustainability.

• Annie

  • That's interesting.

  • Do you think Bitcoin could be a good addition to foreign exchange reserves?

  
• 

  Kang-hoon

  • It's a contentious issue.

  • The article suggests that allocating a small portion of foreign exchange reserves to decentralized currencies like Bitcoin could be prudent, especially considering inflation and geopolitical issues.

• Annie

  • But isn't Bitcoin considered too volatile for such a purpose?

  
• 

  Kang-hoon

  • Volatility is indeed a concern.

  • However, the same argument could be made about other assets held in reserves, such as gold.

  • The key is diversification and risk management.

• Annie

  • I get it.

  • So, what do you think about the U.S. and Germany selling their bitcoins now?

  • Is it a good move?

  
• 

  Kang-hoon

  • In the short term, it might seem like a practical decision to liquidate assets.

  • However, considering Bitcoin's potential for long-term growth, I would categorize this news as a negative development.

  • It could signal a lack of confidence in the asset's future value.

• Annie

  • That's a bit concerning.😟 How do you think this will affect the market?

  
• 

  Kang-hoon

  • The immediate impact could be a drop in Bitcoin's price due to increased supply.

  • In the longer term, it might also influence investor sentiment negatively, as government actions often set precedents.

• Annie

  • Thank you for the detailed explanation, Kang-hoon.

  • This really helps me understand the situation better.👋

  
• 

  Kang-hoon

  • You're welcome, Annie.

  • Always here to help you navigate through the news.

  • Have a great day!

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.