German Government Sells $40.5M in Bitcoin as Part of Ongoing Liquidation

Germany’s government has been actively selling its Bitcoin holdings, contributing to market fluctuations. The latest transaction involved the transfer of 700 BTC, valued at about $40.47 million, to various crypto exchanges. This sale continues a trend observed since June, with significant amounts of Bitcoin being moved out of government wallets.

According to blockchain analytics platform Lookonchain, German authorities have been consistent in their Bitcoin liquidation strategy. The government’s continuous transfers have stirred mixed reactions on crypto Twitter, with some predicting that Bitcoin prices could drop to around $40,000 soon. Despite these sales, the government still holds 39,826 BTC, worth approximately $2.29 billion. The steady sell-offs have added downward pressure on Bitcoin’s value, which has decreased by over 7% in the past week.

Since mid-June, Germany, the US government, and the defunct Mt. Gox exchange have collectively transferred 17,788 BTC, roughly $1.08 billion. Daily BTC transfers from the German government began on July 1, adding to the market’s volatility. As of July 5, the German government holds 41,226 BTC valued at $2.28 billion, while the US government possesses 213,297 BTC worth $11.72 billion, and Mt. Gox controls 141,687 BTC, amounting to $7.78 billion.

Historical Context and Market Impact

These Bitcoins were originally confiscated during various criminal investigations, including cases involving film piracy, darknet marketplaces, and other illegal activities. Initially, Germany held an estimated 39,826 BTC, worth $2.29 billion, obtained through these seizures.

Bitcoin’s price has faced additional volatility due to several factors, including the uncertainty surrounding the US presidential election, the impending repayment of funds by Mt. Gox, and selling pressure from cryptocurrency miners. The defunct Mt. Gox exchange, once a leading platform before its 2014 collapse, is set to begin repaying creditors, which might further depress Bitcoin prices as creditors may sell their recovered funds immediately.

Miners have also been under financial stress, with daily revenue dropping by 75% since the April halving event that reduced their rewards. Consequently, miners have been selling their Bitcoin holdings to cover costs, adding to the selling pressure.

Despite the current downturn, some analysts remain optimistic about Bitcoin’s long-term potential. Tony Sycamore, a market analyst, views this period as one of consolidation and suggests that Bitcoin could retest its March highs and possibly reach $80,000. However, the short-term outlook remains uncertain, with investors closely watching for any dovish signals from the Federal Reserve, which could positively impact the cryptocurrency market.

At the time of writing, Bitcoin is trading at $55,391, marking a 4% decline in the last 24 hours.