Bitcoin Price Decline on Germany, Mt. Gox and Miner Sell Pressure May Be Overblown: NYDIG

Bitcoin

(BTC)
has

plunged
15%
over
the
past
month,
with
many
market
observers
placing
the
blame
on
selling
pressure
from

bitcoin
mining
operators,

Mt.
Gox
refunds
and,
most
recently,
the

German
state
of
Saxony.

The
case
for
the
above
catalysts
as
behind
the
major
price
decline
has
been
overstated,
said
Greg
Cipolaro,
research
head
at
NYDIG,
in
a
Wednesday
note.

“While
emotions
and
psychology
may
rule
over
the
short-term,
our
analysis
suggests
that
the
price
impact
from
potential
selling
may
be
overblown,”
he
wrote.

“We
aren’t
oblivious
to
the
fact
that
other
factors
may
be
at
play
here,
but
it
is
reasonable
to
think
that
the
rational
investor
may
find
this
an
interesting
opportunity
created
by
irrational
fears,”
he
added.

Over
the
past
weeks,
investors
have
been
fixated
on
transfers
related
to
Bitcoin
addresses
linked
to
the
estate
of
defunct
exchange
Mt.
Gox,
the
U.S.
government
and
the
German
state
of
Saxony,
sparking
fears
about
imminent
sales
of
the
over
$20
billion
worth
of
stash
these
three
entities
held
combined.

Read
more:



It’s
Not
Germany
Selling
Bitcoin.
It’s
One
of
Its
States
and
It
Has
No
Choice.

Even
if
all
three
were
selling
all
their
assets
–
roughly
375,000BTC
as
of
June
9
–
at
once,
Cipolaro
found
that
BTC’s
price
decline
over
the
past
weeks
was
deeper
than
it
would
have
been
for
stocks
based
on
Bloomberg’s
transaction
cost
analysis
(TCA)
–
a
well-followed
indicator
long
used
in
traditional
markets
for
estimating
the
price
impact
of
block
sales
of
common
stocks.

Cipolaro
also
argued
that
recent
reports
about
miners
capitulating
and
selling
their
BTC
stash
en
masse
after
this
year’s
halving
event
has
not
just
been
overstated,
but
in
some
cases
wholly
inaccurate.

NYDIG’s
data
showed
that
publicly
listed
mining
companies
actually
increased
their
bitcoin
holdings
in
June.
And
while
the
amount
of
BTC
sold
picked
up
slightly
last
month,
it
was
still
well
below
levels
seen
earlier
this
year
and
last
year.

Cipolaro
advised
against
relying
on
blockchain
data
about
miners
moving
assets
without
knowing
the
nature
of
those
transactions.
“Identifying
that
bitcoins
move
to
an
exchange
or
OTC
desk,
even
if
done
correctly,
only
tells
us
that
coins
moved.
That’s
it,”
he
argued.
“They
could’ve
been
posted
as
collateral
or
lent
out,
not
necessarily
sold.”