The German state of Saxony is swiftly depleting its Bitcoin reserves after offloading another batch of confiscated assets to crypto exchanges on Thursday.
Earlier this year, the government seized Bitcoin from Movie2K, a film piracy website. It then began auctioning off around $3 billion worth of BTC.
Germany Sell-Off Hits 35,000 BTC This Week
On Thursday, Bitcoin wallets linked to German authorities transferred 10,567 BTC (about $600 million) to various entities, including Bitstamp, Coinbase, Kraken, Flow Traders, and Cumberland DRW.
According to blockchain data from Arkham Intelligence, these transactions occurred in multiple batches throughout the day. The wallets now only hold 6,894 BTC ($394 million), down from the nearly 50,000 BTC when they began selling three weeks ago.
At the current pace, Germany could finish the sell-off by Friday or early next week, considering they have unloaded around 35,000 BTC this week alone.
It is worth noting that the total count may still fluctuate, as yesterday, the German government held just under 5,000 BTC. This is due to the unusual practice of wallets receiving portions of the transferred assets—sometimes in the $10 million range—back from exchanges and brokers before the end of the day.
Greg Cipolaro, head of research at digital asset manager NYDIG, described this on-chain activity as “perplexing” in a Wednesday note.
UPDATE: The German Government is running out of Bitcoin.
The German Government just sent another 5000 BTC ($286.44M) to Flow Traders, Coinbase, Kraken, Bitstamp, 139Po and bc1qu.
Today, they have transferred 10627 BTC ($615.33M) in total to market makers and exchanges.
They… https://t.co/vXtHwzUieK pic.twitter.com/4bOI56BJgN
— Arkham (@ArkhamIntel) July 11, 2024
Crypto Investors Voice Oversupply Concerns
Germany’s Bitcoin sell-off has been making headlines over the past few weeks, leaving crypto investors concerned about its impact on the market. Most have linked the recent downturn in asset prices to fears of an oversupply.
German lawmaker and Bitcoin activist Joana Cotar has criticized the German government, saying that it should have adopted the asset as a “strategic reserve currency” to protect against risks in the traditional financial system.
Similarly, the U.S. government, which holds over $12 billion in seized Bitcoin, has moved $240 million worth of BTC related to Silk Road to Coinbase. Additionally, the defunct Japanese exchange Mt. Gox has transferred its Bitcoin to creditors. These actions have raised concerns among investors, given BTC’s decline during these sell-offs.
According to NYDIG’s Cipolaro, fears about looming sell pressure might have been exaggerated. Further, he added that BTC’s decline exceeded the expected price impact if all potential selling materialized.
Bitcoin is trading at $57,281, down 6% over the last week and 15% over the last month. Meanwhile, the series of bearish events have pushed the Crypto Fear & Greed Index—an indicator tracking market sentiment—into the “Extreme Fear” zone for the first time since January last year.
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