Justin Sun's Proposal to Germany
Justin Sun, the founder of Tron and a cryptocurrency billionaire, has made an offer to buy Bitcoin directly from the German government. This proposal aims to prevent the government from flooding the open market with its cryptocurrency holdings, potentially stabilizing Bitcoin prices.
Sun's offer comes in the wake of two weeks of continuous Bitcoin sales by the German government. Analysts suggest that these sales have contributed to a 19% decline in Bitcoin's price over the past month, now standing at $56,849.
"I am willing to negotiate with the German government to purchase all BTC off-market in order to minimize the impact on the market." — H.E. Justin Sun 孙宇晨 (@justinsuntron) July 4, 2024
This announcement, made via X on Thursday, proposes an over-the-counter (OTC) purchase of all the Bitcoin held by the German government. Sun emphasized that his goal is to "minimize the impact on the market."
Justin Sun's Strategic Moves
This move is part of Sun's ongoing efforts to support the cryptocurrency market during critical periods. Previously, he helped protect the systemic CRV loan of Curve's founder, Michael Egorov, from liquidation and considered purchasing FTX's digital assets to prevent market disruptions during its bankruptcy proceedings.
Currently, the German government is under scrutiny for selling a significant amount of Bitcoin. They started liquidating a stash of 50,000 BTC, which was seized in January from operators of the Movie2k.to piracy website.
Extensive Bitcoin Sales
According to Arkham, on June 19 at 16:47 UTC+8, the German Government transferred a total of 1,000 BTC (500 BTC each) to Kraken Deposit and Bitstamp exchanges, worth about $65.14 million. There are currently 47.859k BTC in the German Government address, worth about $3.1 billion.
— Wu Blockchain (@WuBlockchain) June 20, 2024
Blockchain analysts at Arkham first observed on June 19 that the German government was transferring BTC between wallets, with many of these coins likely deposited on exchanges like Coinbase, Kraken, and BitStamp.
The sales resumed on Thursday, with the government transferring an additional 1,300 BTC (valued at $76 million) to these exchanges. Additionally, 1,700 BTC (worth $99 million) were sent to an unidentified address, which Arkham suspects is an institutional or OTC deposit.
Arkham's dashboard indicates that the German government still holds 40,359 BTC, valued at $2.31 billion, at the time of reporting.
Broader Investor Concerns
Beyond the actions of the German government, investors are also concerned about Mt. Gox, the defunct Bitcoin exchange, which is set to distribute 141,000 BTC to creditors. The exchange has announced that payouts will begin this month, though no actual distributions have been observed yet.
Furthermore, on-chain analysis shows that Bitcoin miners sold off significant amounts of Bitcoin in June, driven by revenue declines post-halving, which has put pressure on their business models. The network's total hashrate has dropped by 7.7% since its peak in April.
"Historically, an extreme drop in the hash rate is associated with price bottoming," wrote CryptoQuant in a market report on Wednesday.
Conclusion
The cryptocurrency market is witnessing significant movements, with major sales from the German government and mounting concerns among investors about upcoming distributions and miner sell-offs. Justin Sun's proposal to buy Bitcoin from the German government could potentially stabilize the market, preventing further declines in Bitcoin's price.
