Key Takeaways:
A wallet belonging to the German Federal Criminal Police Office, locally known as the Bundeskriminalamt (BKA), has been selling hundreds of millions of dollars worth of Bitcoin (BTC) for weeks now.
The event has been a key catalyst behind the recent decline of the world’s most valuable cryptocurrency, which resulted in an intense sell-off that saw its price fall below the $60,000 mark for the first since mid-May.
German Police Are Selling $2.2 Billion In Bitcoin Seized From Pirated Movie Site Operators
According to reports, in January 2024, police in the East German state of Saxony announced the seizure of nearly 50,000 BTC, worth around $2.2 billion at the time. The Bitcoin haul was labeled as the “most extensive” of its kind by law enforcement authorities in the country “to date”.
The Bitcoins were seized from the operators of a movie piracy site called ‘Movie2k.to’ that was active over a decade ago. It was then transferred to a wallet controlled by the Bundeskriminalamt.
After tracking the German government’s Bitcoin wallet, Arkham Intelligence reported that the BTC was being moved as early as 2013 when they were originally seized. Today, the BKA-owned wallet holds roughly 32,488 BTC, worth nearly $2 billion at current prices.
In June, the BKA sold 900 BTC, worth approximately $52 million. This was also part of the massive haul seized from the now-defunct movie piracy website. Last week, the government sold an additional 3,000 BTC worth roughly $172 million, followed by a further 2,739 BTC, worth $150 million, liquidated on Monday.
The Federal Criminal Police Office has been sending its Bitcoin reserves to major exchanges such as Coinbase, Bitstamp, and Kraken, where they are sold off, as noted by Arkham Intelligence.
These sales have resulted in Bitcoin’s price experiencing a dramatic fall. On Friday, the world’s largest cryptocurrency by market capitalization sank below $55,000, hitting its lowest level since February 2024, when it was on the upward trajectory to set a new all-time high.
As per data from CoinGecko, at one point during the 24 hours, the entire crypto market lost more than $170 billion in combined market capitalization.
German Parliament Member Urges Government To Hold Bitcoin As “Strategic Reserve Currency”
However, not everyone is happy with the government’s decision to sell off its holdings. Joana Cotar, a member of the German parliament, or Bundestag, said in an X post that rather than selling its Bitcoin, the government should have held on to it as a “strategic reserve currency”.
She even wrote a letter to German Chancellor Olaf Scholz, Finance Minister Chrisitan Lindner, and Minister-President of the state of Saxony Michael Kretschmer, explaining to them that selling Bitcoin “is not only not sensible, but counterproductive”.
Cotar even invited the officials to a lecture by prominent Bitcoin influencer Samson Mow that will held on October 17th at the Paul-Lobe-Haus building in Berlin, the nation’s capital.
Reimbursements To Mt. Gox Customers Is Piling Pressure On BTC Price
It’s not just the German government’s sell-off that is worrying crypto investors. Bitcoin has been under massive selling pressure ever since the collapsed Bitcoin exchange Mt. Gox announced its decision last month to pay billions of dollars worth of BTC and Bitcoin Cash (BCH) to creditors.
The once-leading crypto exchange declared bankruptcy and shut down following a hack in 2014 that saw over 900 Bitcoins being stolen.
On Friday, the trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, said it has begun repaying some customers in BTC and BCH through several designated crypto exchanges.
Investors are concerned that recipients of the refund might sell their holdings for a profit because the tokens are trading at a premium now compared to over a decade ago. What’s bugging investors is how those liquidations could impact the overall mood of the market.
The Fear & Greed Index score – a metric used to measure the markets’ sentiment towards buying and selling cryptocurrencies – for Bitcoin fell to its lowest since late 2022 when the market was faced with the disastrous “Crypto Winter”.
The gauge that measures enthusiasm towards BTC and other cryptocurrencies with a score ranging between 0 – representing “Extreme Fear”, and 100 – indicating “Extreme Greed”, showed a score of 29. This has been recorded as the deepest drop in the fear zone for Bitcoin since January 2023 when it was trading around $17,000.
James Butterfield, head of research at crypto asset manager CoinShares, told CNBC that although the impact of the German government BTC sales and Mt. Gox’s reimbursements were “relatively minor”, it has affected investors’ sentiment.
At the time of writing, Bitcoin (BTC) is trading at $57,633 – down 0.18% in the last 24 hours. Despite its downturn, the apex cryptocurrency is up a good 89% year-on-year.
Latest news: Bitcoin Fear And Greed Index Fall To Lowest Since Crypto Winter 2022
