German Government Reduces Bitcoin Holdings by 90%

TLDR

Germany has sold most of its 50,000 Bitcoin seized from a film piracy site, with only about 4,925 BTC remaining.
The German government has been transferring large amounts of Bitcoin to exchanges and market makers since June 20, 2024.
On July 11, 2024, Germany sent 10,620 BTC (worth about $615 million) to various exchanges and addresses.
Some politicians and Bitcoin supporters criticize Germany’s decision to sell the seized Bitcoin.
The sell-off, along with other factors, has contributed to a recent decline in Bitcoin’s price.

The German government is close to completing its sale of nearly 50,000 Bitcoin, worth billions of dollars, which were seized from a film piracy website earlier this year.

As of July 11, 2024, blockchain data shows that Germany now holds just 4,925 Bitcoin, valued at approximately $284 million.

This dramatic reduction represents a 90% decrease from the government’s initial holdings. The sell-off began on June 20, 2024, when Germany started transferring large amounts of Bitcoin to various cryptocurrency exchanges and market makers.

These transfers accelerated in early July, with significant movements occurring on July 10 and 11.

On July 11 alone, the German government sent 10,620 Bitcoin, worth about $615 million, to major cryptocurrency exchanges such as Coinbase, Bitstamp, and Kraken.

Additional transfers were made to Cumberland, a well-known cryptocurrency trading firm, and other addresses suspected to be institutional trading desks or over-the-counter services.

The government’s Bitcoin wallet briefly dipped below 5,000 BTC after these transfers. However, some funds were quickly returned, bringing the total back above 9,000 BTC.

As of the latest reports, Germany’s Bitcoin holdings stand at 4,925 BTC.

This massive sell-off has not gone unnoticed in the cryptocurrency community. Some view it as a missed opportunity for Germany.

Charles Edwards, founder of Capriole Investments, tweeted, “In a few years, this will be looked back on as one of the biggest geopolitical blunders of all time. It will be studied in universities.”

German lawmaker and Bitcoin supporter Joana Cotar also criticized the government’s decision. Cotar argued that Bitcoin could have been used as a “strategic reserve currency” to protect against risks in the traditional financial system.

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

The sale of such a large amount of Bitcoin has impacted the cryptocurrency market. Bitcoin’s price has fallen by about 13% over the last month, trading at around $57,000 as of July 11.

This decline is attributed partly to Germany’s sell-off and partly to other factors, such as concerns about Mt. Gox potentially distributing over $8 billion worth of Bitcoin to its creditors.

These events have led to a shift in market sentiment. The Crypto Fear & Greed Index, which measures investor sentiment in the cryptocurrency market, has fallen into the “Extreme Fear” zone for the first time since January 2023.

It’s worth noting that while the German government has been transferring Bitcoin to exchanges, this doesn’t necessarily mean all of these funds have been sold. In some cases, Bitcoin has been returned to the government’s wallet after being sent to an exchange.

The German government obtained these Bitcoin in January 2024 when it seized them from the operators of Movie2k, a film piracy website. At the time of the seizure, the 50,000 Bitcoin were worth about $2.8 billion.