- The German government has reportedly sold Bitcoin worth over $195 million, including significant payments to well-known cryptocurrency exchanges such as Coinbase COIN, Kraken, and Bitstamp, according to recent reports by blockchain intelligence company Arkham.
- The German government already sent $130 million to four exchange accounts, including Kraken and Bitstamp, and has now moved $65 million in Bitcoin to probably exchange deposits in only the last day.
- The government moved $600 million in Bitcoin yesterday as part of a larger liquidation campaign. These transactions are a part of that scheme.
- The German government still has around $3.05 billion in Bitcoin in spite of these big sales.
- The German Federal Criminal Police Office (BKA) made a significant seizure that led to the government of Germany acquiring huge Bitcoin holdings.
- In a well-known instance, the owners of the infamous movie pirate website Movie2k.to had about 50,000 Bitcoin, or around $2.12 billion, seized by the BKA.
- After the suspects made a “voluntary transfer” of their Bitcoin to the police in mid-January, the government was able to add the cryptocurrency to its huge collection of digital assets.
- Why This Is Important: Concerns about the possible long-term effects of Germany’s aggressive Bitcoin liquidation have been expressed by financial professionals.
- The inventor of Pulsar Finance, Miguel Loures, emphasized the dangers involved with using this tactic.
- Over the last ten years, Germany’s industrial advantage has been diminishing. Selling Bitcoin now may cause its banking sector to slump similarly, according to Loures.
- Its industrial sector’s competitiveness has been weakened by delayed digital transformation, high energy prices, and international competition. Similarly, Germany runs the danger of losing financial clout and creativity if it sells Bitcoin too soon in the expanding cryptocurrency market.
- Loures underlined that in order to preserve Germany’s economic strength, industry and finance must continue to have a forward-looking mindset.
- He cautioned that a precipitous sell-off of sizable Bitcoin holdings may be an indication of a larger trend of impulsive decision-making that might be detrimental to the nation’s financial prospects.
- Co-founder and CPO of Crypto Valley Exchange James Davies gave further details on the current transactions.
- The profits from the now-defunct pirate website Movie2k are kept in a sizable Bitcoin wallet owned by the Saxony police department in Germany. They have done a few smaller transactions in the last several days that seem to be testing wallet addresses for OTC transactions, as well as a few bigger transfers to major CEX. Some of them have been reversed, but it seems like a significant portion has been sold.
- He went on to say that since the seizure is so large, the police agency is just slowly clearing it, so it will likely take some time.
- The CTO of Komodo Platform, Kadan Stadelmann, drew comparisons with past notable Bitcoin liquidations.
- The possibility of the German government selling its Bitcoin assets is not a recent development. The owners of a website that promoted film piracy willingly gave over these assets. An such instance would be the US authorities seizing Bitcoin from Silk Road operators. The final known sale of assets from the Silk Road was in March 2023, when it sold for $216 million and 9,861 BTC.
- Stadelmann went on to say that a phased sell-off strategy may lessen the effect on the market.
- “Even though the German government owns over $3 billion in Bitcoin, a significant sell-off might not have a significant effect on the market and is more likely to occur gradually rather than all at once,” he said.
- The exchange reserves for Bitcoin are a crucial measure to consider. The total quantity of Bitcoin that is accessible on exchanges as of June 19 is at a three-year low. He said, “This suggests that there may be strong demand from investors hoping to buy the dip, increasing the likelihood of price stabilization.”
- Germany’s ongoing sell-off of its Bitcoin assets has prompted discussion on how to strike a balance between short-term financial rewards and long-term economic strategy.
- Although a substantial sum of money has already been obtained via the liquidation, experts warn that there may be major long-term effects on Germany’s financial industry and its standing in the global cryptocurrency market.
- See Also: Bitwise’s Spot Ethereum ETF May Receive A $100M Investment From Pantera Capital
Source:
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