German Government’s $354M Bitcoin Sell-Off Sparks Market Uncertainty

The German government is preparing to sell off $354 million worth of Bitcoin, intensifying concerns over market volatility. The wallet labeled “German Government (BKA)” on Arkham Intelligence recently loaded up with 6,000 more Bitcoin, indicating the next phase of their BTC liquidation. To date, 5,853.409 BTC has been transferred to various exchanges, including Coinbase, Kraken, and Flow Traders, with plans to sell another $342 million worth.

This move follows the outflow of 3,100 BTC, worth $178 million at the time, on July 9. Additionally, the government withdrew 1,700 BTC, valued at $91.78 million, from Bitstamp, highlighting difficulties in offloading the cryptocurrency on that platform. By July 9, the wallet held approximately 26,000 BTC, worth $1.5 billion, but this has since decreased to around 18,110 BTC, now valued at $1.06 billion, representing a $400 million drop.

Dr. Lennart Ante, CEO of Blockchain Research Lab, explained that the BTC was seized by investigators from the federal state of Saxony. These funds are linked to the illegal streaming portal Movie2k, with one defendant voluntarily transferring the Bitcoin. The Public Prosecutor General’s Office manages the confiscated assets, while the BKA facilitates the transactions. According to Ante, the proceeds from the sales go to the state budget of Saxony, but filmmakers affected by Movie2k may have claims to a portion of the funds, pending court decisions.

Despite the sell-off exceeding $1 billion, Bitcoin prices have rebounded to highs of $58,000 after dipping to $53,900. Ante raised questions about the efficiency of the sales strategy, suggesting that auctions or over-the-counter (OTC) deals might be more effective. The German government’s Bitcoin sell-off coincides with the Mt. Gox repayment of BTC and Bitcoin Cash to creditors. Ante noted that while the current event may soon be overshadowed by new developments, such sell-offs could lead to a broader distribution of Bitcoin ownership and a positive medium-term outlook for the cryptocurrency.

The Code of Criminal Procedure (StPO) § 111p governs the emergency sale of confiscated assets during criminal investigations in Germany. This regulation allows the sale of seized items if there is a risk of significant value loss or storage difficulties. With only around 13,110 BTC left, worth $770 million, the German government has lost its BTC billionaire status.

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