The German government's Bitcoin reserves have dropped to 9,094 BTC, which is merely 18% of their initial holdings of 49,857 BTC seized from the film piracy site Movie2k in January.
Since June 19, billions in Bitcoin have moved from the government's wallet, with increased activity at the beginning of July.
The government wallet briefly fell below 5,000 BTC on July 11 after transferring 10,620 BTC, valued at $615 million, to crypto exchanges like Coinbase, Bitstamp, and Kraken, as well as market maker Flow Traders and two unidentified addresses. Some funds were later returned to the wallet, restoring the balance to over 9,000 BTC.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Impermanent Loss in Crypto? (Explained With Animations)
Blockchain analysis firm Arkham speculates that the two anonymous addresses involved in these transactions might belong to institutional deposit or over-the-counter trading services, although this remains unconfirmed.
The liquidation has drawn criticism from pro-Bitcoin German politician Joana Cotar, who said in a letter to the Minister-President of Saxony Michael Kretschmer:
Instead of selling, I recommend developing a comprehensive Bitcoin strategy. This could include keeping Bitcoin in the treasury, issuing Bitcoin bonds, or creating a conducive regulatory environment.
The sale of Germany's Bitcoin holdings coincides with concerns that the long-defunct crypto exchange Mt. Gox has started to repay its creditors, distributing over $8 billion worth of BTC.
This contributed to a downward trend in Bitcoin prices, currently trading at $57,287, and drove the Crypto Fear & Greed Index, which monitors market sentiment, into the "Fear" zone for the first time since January 2023.
Germany's Bitcoin liquidation strategy continues to raise questions and concerns among the crypto community and financial experts, particularly regarding its impact on market stability and future government policies on digital assets.
