The German government’s Bitcoin reserves have taken a significant hit, dropping to just 9,094 BTC from their initial holdings of 49,857 BTC seized from the film piracy site Movie2k earlier this year. This drastic decrease in Bitcoin holdings has raised eyebrows in the crypto community, especially as billions in Bitcoin have been moved from the government’s wallet since June 19.
The government’s wallet saw a major drop below 5,000 BTC on July 11 after transferring 10,620 BTC to various crypto exchanges and addresses. While some funds were later returned to the wallet, the balance remains significantly lower than before.
Criticism of the government’s decision to liquidate their Bitcoin holdings has come from pro-Bitcoin German politician Joana Cotar, who has called for a more comprehensive Bitcoin strategy that includes keeping Bitcoin in the treasury, issuing Bitcoin bonds, or creating a conducive regulatory environment.
The timing of Germany’s Bitcoin sell-off coincides with reports that the long-defunct crypto exchange Mt. Gox has started repaying its creditors, distributing over $8 billion worth of BTC. This has contributed to a downward trend in Bitcoin prices, currently trading at $57,287, and has pushed the Crypto Fear & Greed Index into the “Fear” zone for the first time since January 2023.
The German government’s Bitcoin liquidation strategy has sparked concerns about its impact on market stability and future government policies on digital assets. With questions still lingering, the crypto community and financial experts are closely watching how this decision will unfold in the coming months.
