Recently, the German government's address has been frequently changing, and a large amount of Bitcoin has been transferred to exchanges such as Coinbase, Bitstamp, and Kraken for sale, which has aroused strong market attention. Many people are full of questions about this. This article quotes Azuma's article to answer them one by one.
Q1: Where does the German government’s Bitcoin come from?
In January 2024, police in the eastern German state of Saxony announced the seizure of nearly 50,000 BTC, worth about $2.2 billion at the time. These bitcoins came from Movie2k.to, a pirated film and television website that was active around 2013. After the seizure, the German Federal Criminal Police Office transferred these bitcoins to an address it actually controlled.
Q2: How much Bitcoin does the German government actually hold?
Currently, the only German government holdings that can be tracked through public information and on-chain analysis are the funds seized from Movie2k.to, which is approximately 50,000 BTC.
Conservatively speaking, the German government held at least 50,000 BTC before the sell-off. As of press time, the German government still holds 22,846 BTC.
Q3: When did the German government start selling? How far has the selling progress progressed?
On June 19 this year, the German government-related addresses were monitored to transfer 6,500 BTC, and 2,500 of them were transferred to exchanges such as Kraken and Bitstamp through new addresses. The price of BTC on that day was about $64,000. Since then, the German government-related addresses have continued to transfer BTC almost every day, ranging from hundreds to thousands of coins.
On July 8, the German government's selling reached its peak. According to AICoin monitoring, the German government transferred a total of 16,038 BTC (about US$900 million) to exchanges and market makers yesterday.
In the early morning of the next day, perhaps because the exchange was unable to complete the sale within the target price range, the German government-related addresses successively recovered a total of 3,673 bitcoins (worth over US$200 million), of which 3,623 bitcoins came from Coinbase, Kraken and Bitstamp, and 50 bitcoins came from the address beginning with bc1qxw.
As of press time, the German government has sold more than 50% of its holdings.
Q4: How to monitor subsequent developments?
Arkham provides a German government address tracking interface. If you use other on-chain tools to detect, you can directly track the following addresses.
Main holding address: bc1q0unygz3ddt8x0v33s6ztxkrnw0s0tl7zk4yxwd.
Common intermediary address for transfer out: bc1qq0l4jgg9rcm3puhhfwaz4c9t8hdee8hfz6738z.
Q5: Will the sell-off continue?
Let me first state the conclusion. It is highly likely that this will continue.
At the current rate of selling, the German government could clear out its Bitcoin holdings within 1 to 2 weeks.
Q6: How big is the actual impact of the sell-off?
According to AICoin’s self-developed custom indicator data, the German government’s selling behavior is significantly related to the decline in Bitcoin prices, and there is a strong positive correlation. The German government sells off and prices fall, the difference is the magnitude of the fall.
Q7: Why is the market reacting so strongly?
In summary, there are three main reasons:
1. The German government did not use the over-the-counter channels commonly used for large-scale transactions, but directly "dumped" it into the exchange. The surge in short-term selling pressure can easily break the buyer liquidity in major exchanges, thereby causing a rapid short-term decline in the market.
2. The German government’s continued selling can easily affect market sentiment, especially in the current pessimistic market environment.
3. The German government’s completely transparent operating mode also gave some short sellers the opportunity to take advantage of the situation, exacerbating market volatility.
Q8: How do various institutions and bigwigs comment on this matter?
The most well-known public comment on this matter is undoubtedly Sun Yuchen’s previous public statement that he is "willing to purchase all the BTC of the German government off-market", but there has been no progress on this matter for the time being.
Back to the topic, many institutions and bigwigs have expressed their views on the German government's selling behavior.
Bitfinex said in its latest report that the market has gradually realized that although the BTC transferred by the German government has a large nominal value, it accounts for a small proportion of the total BTC trading volume, which is a potential market bottom signal.
James Butterfill, director of research at CoinShares, said that although the sell-off was actually relatively small, it significantly affected market sentiment.
Analyst Alex Krüger calculated the current market liquidity and the extent of the market decline caused by several previous large-scale Bitcoin transfers. He believed that in extreme cases, if the German government and Mt. Gox both chose to sell at one time (the latter is assumed to sell 30%), it might cause BTC to fall 10.5% in the short term, but the market could eventually absorb the selling pressure.
Q9: What are the BTC holdings of other governments?
As of press time, according to AICoin data, the US government holds more than 210,000 BTC, the largest share, with a current valuation of US$12.6 billion; the British government holds 61,000 BTC, with a valuation of US$3.5 billion; El Salvador holds 5,806 BTC, with a valuation of US$330 million.
Q10: What are the selling trends of other governments?
In addition to the German government, what we need to pay more attention to at the moment is the potential sales trend of the US government.
It is reported that since 2014, the US government has seized and sold at least 195,091 bitcoins, making a profit of more than $366 million.
Recently, addresses related to the US government have also transferred BTC many times, including transferring 4,000 BTC to Coinbase on June 27, 11.84 BTC to an address starting with 3KHnT on June 28, and 237 BTC to an address starting with bc1qvc on July 4.
At the same time, MtGox has begun to repay creditors BTC and BCH, which is also worthy of everyone's attention.
