Germany’s Saxony state recently sold off 50,000 Bitcoin seized from the movie piracy website movie2k, netting around $2.87 billion. The sale, completed on July 13, generated a significant profit of over $740 million, given the initial acquisition cost of $2.13 billion in January. However, the German government could have made an additional $124 million if it had held onto the Bitcoin a bit longer.
Just after the sale, Bitcoin prices spiked by 16.55%, driven by a surge in market activity following an assassination attempt on former U.S. President Donald Trump. This incident unexpectedly increased his odds of reelection, creating market optimism.
Had Saxony timed its sale for March, when Bitcoin hit a record high of $74,000, the state could have secured $1.5 billion in profits. Unfortunately, Bitcoin’s 12% decline during the sales period also contributed to the missed opportunity.
The Dresden Public Prosecutor’s Office ordered the emergency sale in June, fearing a potential 10% drop in Bitcoin’s value. They clarified that such sales are legally mandated to prevent significant losses, stating, “The sale of valuable items before the conclusion of ongoing criminal proceedings is legally required whenever there is a risk of a significant loss of value of around ten percent or more.”
The office emphasized that law enforcement agencies cannot speculate on the future value of seized items. Their goal was to ensure funds were available for criminal proceedings against movie2k. They noted that the sales were conducted at fair market prices, considering the volatile nature of Bitcoin.
During this period, Bitcoin demand surged among ETF and fund investors. According to CoinShares researcher James Butterfill, the week ending July 13 saw Bitcoin inflows of $1.35 billion, marking the fifth-largest weekly inflow on record. This demand spike coincided with the German government’s Bitcoin sales, further impacting market sentiment and prices.
In comparison, the U.S. government sold Bitcoin seized from Silk Road last year, while countries like El Salvador continue to accumulate Bitcoin as a reserve asset. There is also speculation about the U.S. using Bitcoin for its strategic reserves by 2028.
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