The German government has intensified its liquidation of Bitcoin BTC/USD assets selling $195M in Bitcoin and having just $3B left.
This move generated significant market interest and raised questions about its long-term financial strategy.
According to fresh updates from blockchain intelligence firm Arkham, the German authorities have sold Bitcoin worth over $195 million, with substantial transfers to major cryptocurrency exchanges such as Coinbase COIN, Kraken and Bitstamp.
UPDATE: German Government Still Selling BTC > $195M So Far.
In the past 2 hours, the German Government sent $65M in BTC to 2 likely exchange deposits including Coinbase.
The German Government moved $600M BTC yesterday, sending $130M BTC to 4 likely exchange deposits including… pic.twitter.com/in2urlDBE0
— Arkham (@ArkhamIntel) June 20, 2024
In the past 24 hours alone, the German government has moved $65 million in Bitcoin to likely exchange deposits, following a previous transfer of $130 million to four exchange deposits, including Kraken and Bitstamp.
These transactions are part of a broader liquidation strategy that saw the government move $600 million in Bitcoin yesterday.
Despite these significant sales, the German government still holds approximately $3.05 billion in Bitcoin.
The substantial Bitcoin holdings of the German government originate from a major seizure conducted by the German Federal Criminal Police Office (BKA).
In a high-profile case, the BKA confiscated nearly 50,000 Bitcoin, valued at approximately $2.12 billion, from the operators of Movie2k.to, a notorious film piracy website active in 2013.
The Bitcoin was handed over to the authorities following a ‘voluntary transfer’ from the suspects in mid-January, adding to the government’s substantial digital asset portfolio.
Financial experts have voiced concerns over the potential long-term implications of Germany’s aggressive Bitcoin liquidation.
Miguel Loures, founder of Pulsar Finance, highlighted the risks associated with this strategy.
“Germany has been losing its industrial edge over the past decade. Selling Bitcoin today could lead to a similar decline in its financial sector,” Loures stated.
“Its industrial sector has struggled with global competition, high energy costs, and slow digital transformation, reducing competitiveness. Likewise, by selling Bitcoin prematurely, Germany could undermine its position in the growing cryptocurrency market, risking a loss of innovation and financial influence.”
Loures emphasized the importance of maintaining a forward-looking approach in both industry and finance to sustain Germany’s economic strength.
He warned that a hasty exit from significant Bitcoin holdings might reflect a broader pattern of short-term thinking that could harm the country’s financial future.
James Davies, CPO and co-founder of Crypto Valley Exchange, provided further insights into the ongoing transactions.
“Germany Police Forces in Saxony hold a very large Bitcoin wallet, with the proceeds of Movie2k, a now-defunct piracy site. Over the last few days, they have made a number of small transactions indicative of testing wallet addresses for OTC transactions and a few larger transactions to major CEX. Amongst these, some of this has been reversed, but it appears that a large amount has been sold.”
He further said that a Police department is simply slowly liquidating this seizure and that the seizure is huge, and this can be expected to take some time.
Kadan Stadelmann, CTO of Komodo Platform, drew parallels with other significant Bitcoin liquidations.
“The German government potentially selling its Bitcoin holdings is not a new phenomenon. These assets were voluntarily transferred from operators of a film piracy website. As a similar example, the US government once confiscated Bitcoin from the Silk Road operators. The last known sale of Silk Road assets occurred in March 2023 and totaled 9,861 BTC for $216 million.”
Stadelmann added that a gradual approach to the sell-off might mitigate market impact.
“Although the German government holds more than $3 billion in BTC, a large-scale sell-off might not impact the market too much and is more likely to happen over time, not all at once,” he said.
An important metric to look at is Bitcoin exchange reserves. As of June 19, the total amount of Bitcoin available on exchanges has dropped to a 3-year low.
This indicates a potential high demand from users looking to buy the dip, creating a good chance of price stabilization, he added.
As Germany continues to sell off its Bitcoin holdings, the move has sparked a debate about the balance between immediate financial gains and long-term economic strategy.
While the liquidation has already raised a significant amount of money, experts caution that the broader implications for Germany’s financial sector and its position in the global cryptocurrency market could be profound.