German Government’s Bitcoin Sales Contribute to Market Decline

German Government's Bitcoin Sales Contribute to Market Decline

Key Points:

  • The German government has been selling bitcoin seized from a piracy website. Recent sales include 900 bitcoins in June, 3,000 last week, and 2,739 on Monday.
  • Bitcoin prices fell below $55,000, the lowest since February 2024. The overall crypto market lost over $170 billion in 24 hours.
  • The BKA currently holds 32,488 bitcoins, worth about $1.9 billion. A seizure from Movie2k.to marked Germany’s largest bitcoin confiscation.
  • Some officials argue that bitcoin should be held as a strategic reserve. Joana Cotar has called for a discussion with key government leaders.

In recent weeks, Germany’s government has been offloading hundreds of millions of dollars worth of bitcoin, a key factor behind the cryptocurrency’s sharp selloff. The Federal Criminal Police Office, known locally as the Bundeskriminalamt (BKA), began selling bitcoin from a wallet linked to a now-defunct movie piracy website.

According to blockchain analysis firm Arkham Intelligence on-chain data, the BKA sold 900 bitcoins worth approximately $52 million in June. Last week, the government sold an additional 3,000 bitcoins, valued at roughly $172 million. On Monday, German police sold another 2,739 bitcoins, amounting to $155 million. These transactions have been routed through Coinbase, Bitstamp, and Kraken exchanges.

The German government has not commented on these sales. However, the Bitcoin market has reacted significantly, with prices dropping dramatically. Bitcoin fell below $55,000 on Friday, its lowest level since February 2024, according to CoinGecko data. The crypto market lost over $170 billion in market capitalization within 24 hours.

Aside from Germany’s bitcoin sales, the cryptocurrency has faced additional pressure from the payout of billions of dollars in bitcoin from the collapsed exchange Mt. Gox. The trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, recently announced that repayments in bitcoin and bitcoin cash to creditors had begun through several designated crypto exchanges.

Despite these pressures, the impact of Germany’s bitcoin sales on the overall market might seem minor given the scale of bitcoin’s total issuance. There are about 19.7 million bitcoins in circulation today, worth around $1.1 trillion, according to CoinGecko. However, the sales have undeniably influenced market sentiment. James Butterfill, head of research at crypto asset manager CoinShares, said that although these sales are “relatively minor,” they have “affected market sentiment.” Despite the recent decline, bitcoin’s price has increased 89% over the last 12 months.

In January 2024, police in Saxony seized nearly 50,000 bitcoins, valued at around $2.2 billion at the time, from the operators of Movie2k.to, a movie piracy site active in 2013. This was the largest bitcoin seizure by German law enforcement to date. The bitcoins were transferred to a wallet owned by the BKA, which now holds roughly 32,488 bitcoins, worth about $1.9 billion at current prices.

Not everyone agrees with Germany’s decision to sell its bitcoin holdings. Joana Cotar, a member of the German Bundestag, argued on X last month that the government should hold Bitcoin as a “strategic reserve currency” instead of selling it. She wrote to Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Saxony Minister President Michael Kretschmer that selling bitcoin is “not only not sensible but counterproductive.” Cotar has invited these officials to a lecture with prominent Bitcoin influencer Samson Mow on October 17 in Berlin’s Paul-Lobe-Haus building.

EDITORIAL TEAM
EDITORIAL TEAM
TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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