The German government has depleted most of its Bitcoin holdings after an extended period of selloffs that left crypto investors reeling under selling pressure. The origin of these assets can be traced back to 2013 through the proceeds of the operations of a now-defunct movie content piracy website called Movie2K. Reports came out in mid-January 2024 that the Saxony State Criminal Police Office seized 50,000 BTC from one of the website’s operators as part of criminal investigations directed towards Movie2K.
At the time of Movie2K’s operations in 2013, these assets were collectively worth less than $50 million. However, Bitcoin has appreciated massively since then, and the value of the stockpile had grown to more than $2.5 billion before the seizure in January 2024. Selloffs began on June 19 but were ramped up in July. Notably, on-chain data shows that the selloffs have seen the stash deplete by over 40,000 BTC in the past month, with less than 5,000 BTC now remaining.
Germany’s Selloffs Could End Soon
Numerous news reports and prominent voices in the crypto market have pointed the finger of blame at the German government for the selloffs. However, a small German state called Saxony is responsible for the sales of billions worth of Bitcoin. Nevertheless, the selloffs undoubtedly shocked many investors and largely contributed to a strain on the price of Bitcoin in the past several weeks. This, in turn, led to a chain reaction in the entire market, and many altcoins saw their values plummet in unison with Bitcoin.
According to on-chain data from Arkham Intelligence, the selloffs might be ending soon, which may provide the market with a much-needed break. Notably, the most recent transfer involved the transfer of 2,700 BTC worth $154.56 million just two hours ago into Coinbase, Bitstamp, Kraken, 139Po (likely institutional deposit/OTC service), and address bc1qu.
So far, they have transferred 14,178 BTC to market makers and exchanges in the past 24 hours, bringing their total sales to over 43,000 BTC. At the time of writing, the state government controls 6,894 BTC worth $394.43 million. With most of the assets already gone, the selloffs should have a lesser effect on selling pressure going forward.
What’s Next For Bitcoin?
Bitcoin is currently trading at $57,195 and is up by 5.73% in a seven-day timeframe. While 43,000 BTC is not insignificant, the market has actually been handling it pretty well so far. Bitcoin’s total market cap is in the trillions of dollars, so the recent selloff is just a drop in the digital Bitcoin ocean. This school of thought was recently reaffirmed by Ki Young Ju, the founder and CEO of CryptoQuant. He is of the opinion that the selloffs have prompted an overblown reaction from cryptocurrency investors.
On the other hand, the country of El Salvador has been taking advantage of the selloffs to increase its Bitcoin holdings.
???????? While Germany is selling their #Bitcoin, El Salvador is buying more Bitcoin every day ???????? pic.twitter.com/XKnscuxwBA
— Bitcoin Magazine (@BitcoinMagazine) July 11, 2024
Featured image created with Dall.E, chart from Tradingview.com
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