- Germany owns around $2 billion worth of bitcoin (BTC) and has been selling hundreds of millions of dollars worth in recent weeks, putting selling pressure on the cryptocurrency.
- The German government’s bitcoin holdings stem from a seizure of nearly 50,000 bitcoins from the operators of a movie piracy site in 2023, worth around $2.2 billion at the time.
- Despite the sales, Germany’s Federal Criminal Police Office still holds around 32,488 bitcoins, currently valued at around $1.9 billion.
The German government has been selling off hundreds of millions of dollars worth of seized bitcoin reserves. This selling pressure has contributed to bitcoin’s steep price decline over the past month.
Massive Bitcoin Seizure by German Police
In January 2024, police in the eastern German state of Saxony seized close to 50,000 bitcoins worth around $2.2 billion at the time. This was labelled the most extensive bitcoin seizure to date by German law enforcement.
The bitcoin haul originated from the now-defunct movie piracy website Movie2kto. The funds were transferred to a cryptocurrency wallet owned by Germany’s Federal Criminal Police Office (BKA).
Ongoing Sales From Seized Reserves
The BKA began selling off bitcoin from the seized reserves in June 2024. According to on-chain data, the BKA has sold:
- 900 bitcoins in June worth $52 million
- 3,000 bitcoins in late June worth $172 million
- 2,739 bitcoins on July 4 worth $155 million
The government has been sending the crypto to exchanges like Coinbase, Bitstamp, and Kraken to sell. After the latest sales, the BKA still holds around 32,488 bitcoins worth $1.9 billion.
Bitcoin Price Plummets
In tandem with the German sales, bitcoin’s price has plunged. On July 8, bitcoin sank below $20,000 for the first time since February.
The selloff has wiped over $170 billion off the entire crypto market cap in just 24 hours. While minor compared to bitcoin’s market cap, analysts say the German sales have negatively impacted market sentiment.
In addition to the German sales, bitcoin has faced selling pressure from payouts to creditors of the collapsed Mt Gox exchange. Despite bitcoin’s steep drop, the cryptocurrency is still up 89% over the last 12 months.
Debate Over Government Strategy
Some argue the German government should hold the seized bitcoin as a strategic reserve rather than selling it. However, the government has continued liquidating its reserves through the recent crypto downturn.
