The German government reportedly owns about $2 billion worth of Bitcoin (BTC) and this appears to a matter of concern for cryptocurrency investors. That’s because the nation’s government has been aggressively selling BTC that it had previously seized from an illegal website that has now been taken down.
During the past few weeks, Germany’s government has reportedly been selling millions of dollars worth of BTC, the flagship cryptocurrency. And this seems to be one of the major factors behind the leading digital currency’s significant sell-off.
This past month, the German government had started selling bitcoin from a wallet that is said to be operated by the European nation’s Federal Criminal Police Office (which is locally known as the Bundeskriminalamt or BKA).
The BKA appears to have now sold 900 bitcoins in June — valued at around $52 million as of this past Monday (July 8) — from a major stash acquired from a now-defunct film piracy site. This, according to on-chain data shared by blockchain analysis company Arkham Intelligence.
This past week, the German government sold another 3,000 bitcoins valued at about $172 million. And then this Monday, German authorities proceeded to offload yet another 2,739 bitcoins, which is about $155 million worth of BTC.
As reported by CNBC and other media outlets, the government has been sending its digital assets reserves to large crypto exchanges like Coinbase, Bitstamp, among others.
The German government has not yet offered any detailed comments regarding this activity (at the time of writing).
Partially as a result of these BTC transactions, Bitcoin has seen its price decline sharply. Bitcoin had dropped below $55,000 on Friday, reaching its lowest price level since February 2024, according to available data.
During one particular point, the overall cryptocurrency market had lost over $170 billion in total market cap in just a 24-hour period.
Germany’s BTC sales are not the only thing that is of concern for digital currency investors. The crypto has also been under considerable pressure due to the ongoing payout of billions of dollars’ of the virtual currency from the now-defunct Mt. Gox exchange — which had gone into bankrupt back in 2014 — to creditors.
This past Friday, the Mt. Gox trustee Nobuaki Kobayashi, confirmed it had started processing repayments in bitcoin and bitcoin cash to creditors via crypto exchange platforms.
There are about 19.7 million bitcoins presently in circulation, valued at roughly $1.1 trillion, according to available data from CoinMarketCap and CoinGecko.
For Bitcoin and crypto investors, however, it’s primarily about how those transactions are affecting the sentiment in an uncertain market that has seen a lot of sideways trading.
James Butterfill, head of research at CoinShares, seems to think that these transactions are not going to impact the market as much as many people tend to believe.
To put things into perspective, the BTC price is still up nearly 90% in the past year.
It’s worth noting that back in January 2024, the authorities in the eastern German state of Saxony had confirmed the seizure of about 50,000 bitcoins, valued at roughly $2.2 billion during that particular time.
The effort was referred to by Saxony authorities as the most extensive “seizure of Bitcoins by law enforcement authorities in the Federal Republic of Germany to date.”
The crypto-assets had been seized from the operators of Movie2k.to, which is a movie piracy website that had been quite active back in 2013, and then sent to a digital wallet reporedly controlled by the Federal Criminal Police Office in Germany.
As noted by Arkham Intelligence, which tracks transfers from the German government’s crypto wallet, the said digital tokens actually started moving way back as 2013 when they had first been acquired.
At present, Germany’s BKA controls about 32,488 bitcoins.
As widely reported, many people are not pleased with Germany’s move to sell its BTC holdings.
Joana Cotar, a member of the German Bundestag, which is the European nation’s parliament, stated via social media that instead of selling its BTC, the government needs to hold the digital currency as a type of “reserve currency.”
Cotar even pointed out to the German Chancellor Olaf Scholz, Finance Minister Christian Lindner and Saxony Minister President Michael Kretschmer that selling bitcoin is “not only not sensible, but counterproductive.”
