Fears over the German government’s ongoing liquidation of seized Bitcoin has ignited a 25% drop from its highs.

But Jan Sell, managing director of Coinbase Germany, says not to panic.

Selling “isn’t a particularly anti-crypto move,” he said in an interview with DL News. “It’s not an investment for them. It’s like, if they impound a car or something from people, then at some point they need to get rid of it.”

In January, Germany’s central criminal investigation agency seized 50,000 Bitcoin from Movie2k.to, a film piracy website found guilty of money laundering and other illegal activities.

The German government has transferred 40,000 Bitcoin, valued at around $2.3 billion, to various crypto exchanges — including Coinbase.

Sell said that the Bitcoin Coinbase has sold on behalf of the German government is “not a huge amount,” in terms of the volume the exchange generally sees.

He revealed that Michael Saylor’s MicroStrategy — which holds about $13 billion in Bitcoin — has bought “similar kinds of volumes” over a single weekend.

Still, the selling has certainly shaken investors.

The Crypto Fear and Greed Index, a measure of market sentiment, fell to 26 out of 100 — its lowest reading since January 2023.

And Germany isn’t the only country sitting on confiscated Bitcoin.

Onchain data compiled by Arkham Intelligence shows the US government holds over $13 billion of seized Bitcoin, while authorities in the UK hold around $3.6 billion.

Governments have previously sold confiscated crypto directly to buyers at auction. But for larger amounts it’s not easy to find bidders, leaving them no alternative but to sell the crypto on the open market.

The worry among investors is that if more governments decide to cash in their confiscated crypto, it could rock the market further.

‘Other big sales’

Since the German government started selling its Bitcoin on June 19, the top cryptocurrency has struggled to recover.

Sell said he doesn’t think the German government’s selling is wholly responsible for the drop, though.

“There’s a few other big sales going on at the moment,” he said without elaborating.

One worry is the distribution of Bitcoin from Mt. Gox, the Japanese crypto exchange that was hacked in 2014.

The defunct exchange is expected to return over 140,000 Bitcoin, worth some $8 billion, to victims this month.

Many recipients are expected to cash out.

Since Mt. Gox suspended trading over 10 years ago, Bitcoin has risen over 10,000%.

Tim Craig is a DeFi Correspondent at DL News. Got a tip? Email him at tim@dlnews.com.