Blockchain
Germany Holds $2 Billion in Bitcoin (BTC). It’s Driving Investors Crazy
Bitcoin has also been subject to selling pressure from the German government and the collapse of the Mt. Gox Bitcoin exchange.
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The BKA Sold 900 bitcoins in June — worth about $52 million as of Monday — from a massive haul seized from a now-defunct movie piracy website, according to on-chain data tracked by blockchain analytics firm Arkham Intelligence.
Last week the government sold another 3,000 bitcoins worth about $172 million. Then on Monday, German police sold another 2,739 bitcoinsthat is, $155 million in cryptocurrency.
The government has sent its cryptocurrency reserves to exchanges such as Monetary baseBitstamp and Kraken.
Contacted by CNBC on Monday, the German government was not immediately available for comment.
Along with these sell-offs, the price of bitcoin has fallen dramatically. Bitcoin sunk under $55,000 on Friday, hitting its lowest level since February 2024, according to CoinGecko data.
Data from CoinGecko showed that at one point in the day, the entire cryptocurrency market had lost more than $170 billion in total market capitalization in a 24-hour period.
Bitcoin sales in Germany aren’t the only concern for cryptocurrency investors. The cryptocurrency has also been under pressure due to the payment of billions of dollars in digital currency by Mt. Gox Bitcoin Exchange Collapse — which went bankrupt in 2014 — to creditors.
On Friday, Mt. Gox bankruptcy trustee Nobuaki Kobayashi said he has begun issuing refunds in bitcoin and bitcoin cash to some creditors through a number of designated cryptocurrency exchanges.
Hundreds of millions of dollars is a lot of money. But it’s a drop in the ocean when you look at the overall issuance of bitcoin tokens.
According to data from CoinGecko, there are approximately 19.7 million bitcoins in circulation today, worth $1.1 trillion.
For investors, however, the most important thing is how these sales affect the market mood.
James Butterfill, head of research at cryptocurrency manager CoinShares, told CNBC that while the bitcoin sell-off was “relatively minor,” it had “impacted market sentiment.”
The price of Bitcoin has still increased by a good 89% in the last 12 months.
In January 2024, police in Saxony, eastern Germany, announced the seizure of around 50,000 bitcoins, worth around $2.2 billion at the time.
Saxony police described the seizure as “the largest seizure of Bitcoin by law enforcement authorities in the Federal Republic of Germany to date.”
The funds were seized from the operators of Movie2k.to, a movie piracy site that was active in 2013, and transferred to a crypto wallet owned by the German Federal Criminal Police Office.
According to Arkham Intelligence, which monitors the movements of the German government’s bitcoin wallet, the tokens began circulating as early as 2013, when they were first seized.
Today, Germany’s BKA holds about 32,488 bitcoins. At current prices, the government’s holdings are worth about $1.9 billion.
However, not everyone is happy with Germany’s decision to sell its bitcoins.
Joana Cotar, a member of the German Bundestag, the country’s parliament, argued in a post on X last month that rather than selling its bitcoin, the government should hold the token as a “strategic reserve currency.”
Cotar said he had written to German Chancellor Olaf Scholz, Finance Minister Christian Lindner and Saxony Prime Minister Michael Kretschmer to tell them that selling bitcoin was “not only not sensible, it was also counterproductive.”
He said he had invited German officials to a conference with Samson Mow, a prominent Bitcoin industry influencer, on October 17 at the Paul-Lobe-Haus building in Berlin.