German Government Holds Approximately 2 Billion Worth of Bitcoin Leaving Cryptocurrency Investors in Shock

CoinWorld reported:
For several weeks, the German government has been selling billions of dollars worth of Bitcoin, which is a key factor behind the significant sell-off of cryptocurrencies. Last month, the German government started selling Bitcoin from a wallet operated by the Federal Criminal Police Office, known locally as the Bundeskriminalamt or BKA. According to on-chain data tracked by blockchain analysis company Arkham Intelligence, the BKA sold 900 Bitcoins in June, worth about $52 million as of Monday, which were seized from a now-defunct movie piracy website. Last week, the government sold another 3,000 Bitcoins, worth about $172 million. On Monday, the German police sold 2,739 Bitcoins, equivalent to $155 million worth of cryptocurrency.
The government has been sending its cryptocurrency reserves to exchanges such as Coinbase, Bitstamp, and Kraken. When CNBC contacted the German government on Monday, they did not immediately comment.
Bitcoin price reaction
Meanwhile, the price of Bitcoin has plummeted during these sales. Data from CoinGecko shows that Bitcoin fell to below $55,000 on Friday, reaching its lowest level since February 2024. CoinGecko’s data shows that at one point that day, the total market value of the entire cryptocurrency market evaporated by over $170 billion within 24 hours. The German Bitcoin sales are not the only concern for Bitcoin investors. The bankruptcy of the Bitcoin exchange Mt.Gox in 2014 put pressure on the cryptocurrency as well, as it had to repay creditors billions of dollars’ worth of Bitcoin. On Friday, Nobuaki Kobayashi, the trustee of Mt.Gox’s bankruptcy estate, stated that the company has begun repaying Bitcoin and Bitcoin Cash to some creditors through multiple designated cryptocurrency exchanges. Several hundred million dollars is a significant amount of money. However, if you look at the overall token issuance of Bitcoin, it is just a drop in the ocean.
According to CoinGecko, there are currently around 19.7 million circulating Bitcoins, valued at $1.1 trillion. However, for investors, it’s all about how these sales are affecting market sentiment. James Butterfill, Research Director at cryptocurrency asset management company CoinShares, told CNBC that while the Bitcoin sales are “relatively small,” they are “impacting market sentiment.” Bitcoin’s price has still risen by 89% in the past 12 months.
Why Germany has $2 billion worth of Bitcoin
In January 2024, the police in the eastern German state of Saxony announced the seizure of nearly 50,000 Bitcoins, valued at around $2.2 billion at the time of seizure. The Saxony police described this batch of Bitcoins as the “largest Bitcoin seizure operation by law enforcement authorities in the Federal Republic of Germany to date.” These funds were confiscated from the operators of the active movie piracy website Movie2k.to in 2013 and transferred to an encrypted wallet owned by the Federal Criminal Police Office in Germany.
According to blockchain analysis company Arkham Intelligence, which tracks the movements of the German government’s Bitcoin wallet, the Bitcoin started moving as early as 2013 when it was initially seized. Today, the German BKA holds approximately 32,488 Bitcoins. At the current price, the government’s holdings are worth around $1.9 billion. However, not everyone is satisfied with Germany’s decision to sell its Bitcoin holdings. German Federal Parliament member Joana Cotar expressed in a post on X last month that the government should not sell Bitcoin and should instead use it as a “strategic reserve currency.” Cotar stated that she has written to German Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Saxony Minister Michael Kretschmer, telling them that selling Bitcoin is “not only unwise but counterproductive.” She invited German officials to speak alongside renowned Bitcoin influencer Samson Mow at the Paul Lobe Haus building in Berlin on October 17.