This is Who's Selling Bitcoin, Billionaire Michael Dell Signals Bitcoin Interest, WikiLeaks Founder Julian Assange Freed
News Block #44 (06/27/2024)
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This is Who’s Selling Bitcoin
It’s crazy to think that Bitcoin is hovering above $60,000, and everyone seems to be in a panic. Bitcoin was half this price just one year ago! Regardless, the fear in the market is palpable this week.
Bitcoin is now down nearly 10% on the month and about 15% off of its all-time high.
This is a pretty standard bull market correction after nearly 18 months of price appreciation. In previous bull markets, Bitcoin dropped around 20% on multiple occasions before continuing its march higher.
Some people feel that the sideways price action is actually a healthy development. Joe Carlasare elaborates on this point in my recent Coin Stories interview with him, so if you need to calm your nerves amid this price drop, then it’s the perfect bullish interview for you.
Last week on the News Block, we discussed a few potential theories about what’s behind this recent drawdown, and this week, we have a couple more.
For nearly a decade now, Mt. Gox customers have patiently waited to receive the bitcoin they lost after the exchange was hacked in 2014. In total, nearly 142,000 bitcoin worth approximately $9 billion are waiting to be distributed to Mt. Gox creditors.
That wait will soon be over. The trustee of the Mt. Gox bankruptcy estate announced that it will begin the repayments at the beginning of July.
The market appears to be moving on this information because it fears that when the Mt. Gox customers receive their Bitcoin, they will sell it, causing the Bitcoin price to crash. But the market selling off on this news is likely misguided. Here’s why:
It’s important to remember that if these creditors wanted to sell, then they’ve had 10 years to do so by selling their bankruptcy claims to willing buyers. If they still own them, then they are likely long-term believers in Bitcoin.
Firms like Off the Chain Capital and Fortress were happy to scoop up these claims at a discounted price, essentially making the bet that Mt. Gox would eventually deliver the bitcoin. These entities now control an estimated 15% of all claims.
The question becomes, “Will these firms be sellers once they receive the bitcoin?” Galaxy Digital’s Alex Thorn doesn’t think so. He believes these firms consist of partners who are high net-worth Bitcoin holders rather than traders.
So, many of the claims are owned by firms unlikely to sell. And, as I mentioned before, the individual creditors could have sold, but they didn’t. They held, and they benefited from their conviction as the value of their bitcoin holdings increased more than 140x since the Mt. Gox bankruptcy. These people likely bought bitcoin below $800.
Because of this, if they sell their bitcoin, they’ll have to deal with a huge tax hit. This is just another reason why they won’t sell.
All these points explain why the impact of the Mt. Gox drama on Bitcoin’s price is likely exaggerated.
Governments Are Selling Their Sats
Although we don’t know exactly how much Bitcoin will be sold from the Mt. Gox situation, we do have a close idea of how much bitcoin the German government has been selling over the last month.
First reported by Arkham Intelligence, addresses linked to the German Federal Criminal Police Office show that the government has sent more than $220 million worth of bitcoin to exchanges in the last week, indicating that it intends to sell it.
The German government seized 50,000 bitcoin earlier this year connected to a movie piracy website. This immediately made Germany the fourth largest nation-state holder of Bitcoin, behind the U.S., China, and the UK.
But instead of holding onto the Bitcoin, Germany has decided to sell it.
So, Germany appears to be following the US government’s lead here. A little over a year ago, the U.S. unloaded nearly 10,000 bitcoin for $216 million and sent an additional 2,000 bitcoin to a flagged Coinbase wallet.
Furthermore, it seems the U.S. government couldn’t let Germany steal all the headlines — Arkham Intelligence reported on Wednesday that the U.S. government sent $240 million worth of Bitcoin to Coinbase Prime, presumably with the intention to sell it.
These governments don’t seem to understand the value of what they own, which is ironic given that Bitcoin could potentially save them from their own recklessness. At a time when they are drowning in debt and continuing to spend like crazy, they are selling the one asset that might actually improve their balance sheets.
I guess the same rule applies to nation states as individuals…You get the price that you deserve. Meanwhile, countries like El Salvador continue to steadily accumulate Bitcoin.
If Congressman Matt Gaetz gets his way, the U.S. government might soon have more bitcoin to sell. On Tuesday, Gaetz introduced legislation that would require the IRS to accept Bitcoin as payment for federal income taxes.
Gaetz said in a statement, “By enabling taxpayers to use Bitcoin for federal tax payments, we can promote innovation, increase efficiency, and offer more flexibility to American citizens.”
Gaetz was in El Salvador for President Bukele’s inauguration, so who knows, maybe he was inspired in Bitcoin country. This bill is just another piece of pro-bitcoin legislation that seems to pop up every other week these days.
Now – I don’t know who in their right mind would choose to pay their taxes in Bitcoin, but maybe some will. And in that case, the US government will be getting more sats. If they know what’s good for them, they would hold onto some of it.
Billionaire Michael Dell Signals Bitcoin Interest
I thought one of the most exciting developments over the last week was billionaire entrepreneur Michael Dell's sharing of a series of tweets that made it appear he’s on team Bitcoin.
It started with Dell tweeting “Scarcity creates value” and retweeting Michael Saylor’s reply.👇
He then posted a meme of Cookie Monster munching on some Bitcoin.
This had people excited because Michael Dell is one of the most innovative entrepreneurs and business leaders alive today. Bloomberg ranks him as the 11th wealthiest person in the world, with a net worth of around $118 billion.
But ok – these are just a couple of tweets. What are the odds Dell is actually a true Bitcoiner? Well, let’s just say the cookie crumbs are there.
In 2014, Dell Technologies offered to host Bitcoin miners and began accepting Bitcoin for payments. This was later phased out in 2017 due to low demand. But then in 2021, Michael Dell was quoted in an interview saying that if he were a teen today, he’d be “all over” crypto.
But more importantly, Dell has shown time and time again that he’s an innovative leader who isn’t afraid to try something new. In 1996, Dell began selling PCs online, which was a groundbreaking move at the time.
He then made a bold decision to take his company private in 2013. It’s apparent with this move that Dell understands how to leverage cheap debt to buy real assets. In this case, the asset was his own company.
But why did he do this? Dell said he wanted to focus on long-term investments, and that it’s easier to do this when you don’t have shareholders breathing down your neck every quarter. Low time preference, anyone?
It turned out to be a masterful move. Dell went on to more than quadruple its valuation in the coming years as he successfully pivoted the company from PCs to becoming a leader in cloud computing, AI, and IT infrastructure.
But maybe most importantly, after he took his company private, Michael regained more than 50% ownership of the company and has majority control over the board, similar to Michael Saylor. This is an important factor when it comes to a CEO’s ability to implement a corporate Bitcoin treasury strategy, which is one reason why bitcoiners are so excited.
So let’s recap:
Dell has a history of supporting Bitcoin ✅
He prefers to think long-term ✅
He isn’t afraid of new ideas and technologies ✅
He knows how to leverage cheap money to buy assets ✅
And he controls the board of his company ✅
Sounds like a Bitcoiner to me.
Dell– the company – is currently sitting on billions of dollars worth of cash, just melting away. Are we looking at the next MicroStrategy here?
As the saying goes, “Be Like Mike.”
WikiLeaks Founder Julian Assange Freed
The last story had me in a great mood this week. Julian Assange has been freed after spending 5 years behind bars in a UK maximum security prison after his company released classified documents that exposed war crimes committed by the U.S. in the Afghanistan and Iraq Wars.
Court documents filed Monday showed that a plea deal has been struck, and since Julian has already served 5 years in prison, he will be freed.
Freedom advocates around the world celebrated the news. One of those was Presidential candidate Robert F. Kennedy, but he also provided some sobering context:
Kennedy brings up important points, but for now I’m happy Assange gets to walk free and return to his family. I introduced Julian’s wife, Stella Assange, on stage at Bitcoin Amsterdam 2022, where she gave a keynote presentation describing the parallels between Bitcoin as a permissionless way to transact value and Wikileaks’ mission to disseminate vital information to the public.
Assange has long been a proponent of Bitcoin, and so when it was announced that he would have to go into debt to afford the $500,000 flight from London to Saipan to sign the plea deal, an anonymous Bitcoin doner was quick to step in and donated more than 8 bitcoin to cover the costs.
The State’s persecution of Assange has shined a spotlight on the freedom of speech and freedom of press in the digital age.
In the future, I believe that Bitcoin will be seen as a technology that empowers the individual to fight back against a corrupt State that is increasingly infringing on our freedoms.
It will be interesting to see what Assange does next, and I’m sure fighting for Bitcoin will be part of whatever that is.
Until next week, keep stacking.
- N₿
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