Advertisement
The German government’s recent sales of bitcoin, totaling hundreds of millions of dollars, have significantly contributed to a sharp decline in the cryptocurrency’s market value, causing concern among investors. Over the past few weeks, Germany’s Federal Criminal Police Office (BKA) has been offloading bitcoin from a wallet associated with seized assets.
In June, the BKA sold 900 bitcoins, valued at approximately $52 million, which were part of a larger cache confiscated from a defunct movie piracy website. The sales have continued, with an additional 3,000 bitcoins worth roughly $172 million sold last week and another 2,739 bitcoins, or $155 million, sold on Monday.
These transactions have been traced to exchanges such as Coinbase, Bitstamp, and Kraken, according to data from blockchain analysis firm Arkham Intelligence. The German government has not commented on these sales.
The impact on Bitcoin’s price has been significant. The cryptocurrency dropped below $55,000 on Friday, its lowest level since February 2024, according to CoinGecko. The entire crypto market saw over $170 billion wiped off its market capitalization in just 24 hours.
Bitcoin is also facing selling pressure from the collapsed Mt. Gox exchange, which is repaying creditors in bitcoin and bitcoin cash. Nobuaki Kobayashi, the trustee for the Mt. Gox bankruptcy estate, recently began repayments through designated crypto exchanges.
Despite these pressures, the overall bitcoin market remains vast, with around 19.7 million bitcoins in circulation valued at $1.1 trillion. However, investor sentiment has been affected by these large-scale sales. James Butterfill, head of research at CoinShares, noted that while the bitcoin sales are “relatively minor,” they have nonetheless impacted market mood.
Bitcoin’s price has seen an 89% increase over the past 12 months, but recent sales have created uncertainty.
The German government’s substantial bitcoin holdings stem from a seizure by Saxony police in January 2024, amounting to nearly 50,000 bitcoins, worth approximately $2.2 billion at the time. These funds were taken from the operators of Movie2k.to, a movie piracy site, and transferred to the BKA’s crypto wallet.
Today, the BKA holds around 32,488 bitcoins, valued at approximately $1.9 billion. Not everyone agrees with the government’s decision to liquidate these assets. Joana Cotar, a member of the German Bundestag, has publicly criticized the move, arguing that Germany should retain bitcoin as a “strategic reserve currency.” She has communicated her concerns to German Chancellor Olaf Scholz and other officials, advocating for the government to hold rather than sell its bitcoin assets.
Cotar has also invited officials to a lecture by prominent bitcoin influencer Samson Mow in October to discuss the strategic importance of bitcoin holdings.