Germany’s government has significantly reduced its Bitcoin holdings after a series of large transactions to cryptocurrency exchanges. The wallet, containing Bitcoin seized from a film piracy website in January, has seen its holdings dwindle to just 18% of its original size in a fire sale that began in June and intensified in July.
Bitcoin Slump Follows Mass Sell-Off
On July 11th, the German government wallet briefly dipped below 5,000 BTC after transferring a significant amount, valued at roughly $615 million, to Coinbase, Bitstamp, Kraken, Flow Traders, and two anonymous addresses. While some of these funds were later returned, Germany’s Bitcoin holdings remain a fraction of what they once were.
This aggressive sell-off by a major government player has coincided with a slump in Bitcoin prices. Experts suggest the German fire sale, coupled with concerns surrounding Mt. Gox creditor payouts, has contributed to a bearish market sentiment. The Crypto Fear & Greed Index, a tool measuring market sentiment, has entered the “Extreme Fear” zone for the first time since early 2023.
Bitcoin as a Strategic Reserve?
The German government’s decision to sell its seized Bitcoin has drawn criticism from some. Joana Cotar, a German lawmaker and Bitcoin advocate, argued that the cryptocurrency could have been held as a “strategic reserve currency” to mitigate risks within the traditional financial system.
The identity of the two anonymous recipients, with addresses ending in “139Po” and “bc1qu,” remains unclear. However, blockchain intelligence firm Arkham believes they are likely institutional deposit or over-the-counter trading service providers.
Future of Bitcoin in Germany Uncertain
With a significant portion of its seized BTC sold, Germany’s stance on the cryptocurrency remains to be seen. The recent sell-off has undoubtedly impacted the market, and its long-term effects are yet to be determined.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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