Reference Message Network July 14 Report According to the US Consumer News and Business Channel website on July 8, the German government has sold hundreds of millions of dollars worth of Bitcoin in recent weeks—a key factor driving intensive sell-offs of the cryptocurrency.
Last month, the German government began selling Bitcoin from a wallet operated by the Federal Criminal Police Office (BKA). Blockchain analysis by Arkham Intelligence tracked on-chain data showing that the BKA sold 900 Bitcoin in June—worth approximately $52 million as of Monday. These Bitcoins were seized from a now-defunct movie piracy website.
Last week, the German government sold another 3,000 Bitcoin (~$172 million). On Monday, German police sold an additional 2,739 Bitcoin (~$155 million).
As these sales progressed, Bitcoin’s price plummeted. Data from Coin Tiger shows Bitcoin falling below $55,000 on Friday—its lowest level since February 2024. At one point, the entire cryptocurrency market lost over $170 billion in 24-hour market capitalization.
Market Pressures Beyond Germany
- Mt. Gox Repayments: Bitcoin faces additional pressure from Mt. Gox’s bankruptcy estate repaying creditors in Bitcoin and cash. Trustee Nobuaki Kobayashi confirmed distributions via select exchanges.
- Scale Context: While hundreds of millions seem substantial, it’s a fraction of Bitcoin’s total circulating supply (~19.7 million BTC, worth $1.1 trillion).
Impact on Investor Sentiment
James Butterfill, Head of Research at a crypto investment firm, told CNBC that despite the "relatively small" amounts, German sales have "affected market sentiment." Notably, Bitcoin’s price remains up 89% over the past 12 months.
Background: The Seized Bitcoin
- In January 2024, Saxony police seized nearly 50,000 BTC (~$2.2 billion at the time)—Germany’s largest-ever crypto confiscation.
- Originating from the 2013 seizure linked to Movie2k.to, these BTC were transferred to a BKA-controlled wallet. Arkham Intelligence notes movement since 2013.
- Current BKA holdings: ~32,488 BTC (~$1.9 billion at current prices).
Political Opposition
Joana Cotar, a Bundestag member, criticized the sales on X, urging Bitcoin to be held as a "strategic reserve currency." She wrote to Chancellor Olaf Scholz and Finance Minister Christian Lindner, calling the decision "unwise and counterproductive."
FAQ Section
Q1: Why is Germany selling its Bitcoin holdings?
A1: The sales are likely for liquidity purposes, though officials haven’t provided explicit reasons. Critics argue for long-term strategic retention.
Q2: How does this affect Bitcoin’s price?
A2: Large-volume government sales create sell pressure, contributing to short-term price drops and shaken investor confidence.
Q3: What percentage of Bitcoin’s supply does Germany control?
A3: The BKA’s ~32,488 BTC represent ~0.16% of circulating supply—a modest but market-moving amount.
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Data sourced from Coin Tiger and Arkham Intelligence. Compiled by Zhu Jie.