The German government’s Bitcoin sell-off may be about to end and its impact on the flagship cryptocurrency is close to being negligent, with its wallets recently sending an additional 3,250 coins worth roughly $190 million to exchanges, to the point it now has around $500 million worth of BTC left.
The German government’s Bitcoin stash was originally of nearly 50,000 BTC, seized from the operators of a film piracy platform, Movie2k.to, which was last active over a decade ago. Since mid-June, authorities have been offloading these coins on major exchanges including Coinbase, Kraken and Bitstamp, as well as over-the-counter trading desks.
The latest sale brings the total offloaded to over 40,000 Bitcoin, valued at approximately $2.35 billion, over the past month. On-chain data suggests Germany now holds just 9,925 Bitcoin, worth $560 million.
This prolonged liquidation has weighed heavily on Bitcoin’s price, which dipped below $53,000 over the selling pressure earlier this month, when repayments from defunct cryptocurrency exchange Mt. Gox restarted to creditors.
However, with the government’s reserves dwindling, analysts anticipate a potential reprieve for the cryptocurrency market. The remaining $560 million represent a relatively small portion of daily Bitcoin trading volumes and pale in comparison to Germany’s initial haul.
JUST IN: The German Government just sent another 3250 BTC ($191.02M) to Cumberland, Coinbase, Bitstamp, Kraken, 139Po (likely institutional deposit/OTC service), and address bc1qu.So far today, they have transferred a total of 5627 BTC ($328.89M) to market makers and exchanges.… pic.twitter.com/DjCzVtqaCU
— Arkham (@ArkhamIntel) July 11, 2024
Some experts predict Germany could exhaust its entire Bitcoin stash in the near future if the current selling pace continues. The government’s decision to sell has drawn criticism from Bitcoin proponents within the German parliament, who argue that the government should hold onto the scarce digital asset instead of converting it to euros.
Notably a Bitfinex report has suggested that “a potential local bottom has been reached.” The report noted the market is now realizing that while the German government is selling large amounts of BTC, these funds are a “relatively small number” as a proportion of all the BTC bought and sold since last year.
The firm also noted that volatility metrics are showing signs of stabilization. The narrowing spread between implied volatility and historical volatility suggests that the market anticipates a period of greater stability going forward. This implies that Bitcoin’s price may range around its current levels or experience less dramatic declines, the firm said.
Featured image via Unsplash.