The German government has depleted most of its Bitcoin holdings after an eextended sales periodfs that left crypto investors reeling under pressure to sell. The origins of these assets can be traced back to 2013 via proceeds from the activities of a now-defunct movie content piracy website called Movie2K. In mid-January 2024, reports emerged that the Saxon State Criminal Police Office had seized 50,000 BTC from one of the website’s operators as part of criminal investigations targeting Movie2K.
At the time of Movie2K’s operations in 2013, these assets were collectively worth less than $50 million. However, Bitcoin has since skyrocketed in value, with the value of the stockpile growing to over $2.5 billion before its seizure in January 2024. The sale started in June 19 but were ramped up in July. Interestingly, on-chain data shows that the sell-off has reduced the supply by over 40,000 BTC in the past month, while there is now less than 5,000 BTC left.
German sell-off could end soon
Numerous news reports and prominent voices in the crypto market have blamed the German government for the sell-off. However, a small German state called Saxony is responsible for the sale of billions of Bitcoin. Nevertheless, the sell-off has undoubtedly shocked many investors and has contributed greatly to the pressure on Bitcoin’s price in recent weeks. This in turn has led to a chain reaction throughout the market, with many altcoins seeing their values plummet along with Bitcoin.
According to on-chain data from Arkham Intelligence, the sell-offs could end soon, giving the market a much-needed break. Notably, the most recent transfer was the transfer of 2,700 BTC worth $154.56 million just two hours ago to Coinbase, Bitstamp, Kraken, 139Po (likely institutional deposit/OTC service), and address bc1qu.
So far they have transferred 14,178 BTC to market makers and exchanges in the last 24 hoursbringing their total turnover to over 43,000 BTC. At the time of writing, the state government controls 6,894 BTC worth $394.43 million. With most of the assets already gone, the sell-offs should have less of an effect on selling pressure going forward.
What is the future of Bitcoin?
Bitcoin is currently trading at $57,195 and is up 5.73% in a span of seven days. While 43,000 BTC is not insignificant, the market is actually I can handle it pretty well so far. Bitcoin’s total market cap is in the trillions of dollars, so the recent sell-off is just a drop in the ocean in the digital Bitcoin ocean. This line of thinking was recently reconfirmed by Ki Young Ju, the founder and CEO of CryptoQuant. He believes that the sell-off has caused an overreaction from cryptocurrency investors.
On the other hand, the country of El Salvador has taken advantage of the sell-off to increase its Bitcoin holdings.
🇩🇪 While Germany their #BitcoinEl Salvador is buying more Bitcoin every day 🇸🇻 photo.twitter.com/XKnscuxwBA
— Bitcoin Magazine (@BitcoinMagazine) July 11, 2024
Main image created with Dall.E, chart from Tradingview.com