Bitcoin has also faced selling pressure from the German government and collapsed Bitcoin exchange Mt. Gox.
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The German government has been selling hundreds of millions of dollars worth of Bitcoin for weeks — a key factor behind the sharp selloff in the cryptocurrency.
Last month, the German government began selling Bitcoin through wallets operated by the country’s Federal Criminal Police Office, known locally as the Bundeskcriminalamt or BKA.
BKA 900 Bitcoins sold in June As of Monday, some $52 million worth of the money came from a now-defunct movie piracy website, according to on-chain data tracked by blockchain analytics firm Arkham Intelligence.
Last week, the government Sold an additional 3,000 Bitcoins Valued at approximately US$172 million. Then on Monday, German police Sold another 2,739 Bitcoinsor $155 million worth of cryptocurrency.
Governments have been sending their cryptocurrency reserves to exchanges, such as Coin libraryBitstamp and Kraken.
The German government had no immediate comment when contacted by CNBC on Monday.
Bitcoin price reaction
Along with these sales, the price of Bitcoin also dropped sharply. Bitcoin It fell below $55,000 on Friday, hitting its lowest level since February 2024, according to CoinGecko data.
Data from CoinGecko shows that at one point that day, the total market value of the entire cryptocurrency market had evaporated by more than $170 billion in 24 hours.
Bitcoin sales in Germany are not the only concern for Bitcoin investors. The cryptocurrency has also come under pressure after bankrupt Bitcoin exchange Mt. Gox paid out billions of dollars worth of Bitcoin to creditors in 2014.
On Friday, Nobuaki Kobayashi, the trustee of Mt. Gox’s bankruptcy estate, said the company has begun repaying debts to some creditors in Bitcoin and Bitcoin Cash through some designated cryptocurrency exchanges.
Hundreds of millions of dollars is a lot of money. But if you look at Bitcoin’s overall token issuance, it’s just a drop in the ocean.
According to data from CoinGecko, there are currently approximately 19.7 million Bitcoins in circulation, worth $1.1 trillion.
What matters most to investors, though, is how these sales affect market sentiment.
James Butterfill, director of research at crypto asset management firm CoinShares, told CNBC that although the Bitcoin sales were “relatively small,” they “affected market sentiment.”
The price of Bitcoin is still up 89% over the past 12 months.
Why Germany Has $2 Billion in Bitcoin
In January 2024, the police in Saxony, eastern Germany, announced that they had seized nearly 50,000 Bitcoins, worth approximately US$2.2 billion at the time of the seizure.
Saxony state police called the operation “the largest Bitcoin seizure to date by a law enforcement agency in the Federal Republic of Germany.”
The funds were seized from the operators of Movie2k.to, an active movie piracy website in 2013, and transferred to a crypto wallet owned by Germany’s Federal Criminal Police Office.
According to Arkham Intelligence, a blockchain analytics firm that tracks the movements of German government Bitcoin wallets, Bitcoin began flowing as early as 2013 when it was initially seized.
Today, the German BKA holds approximately 32,488 Bitcoins. At current prices, the government’s holdings are worth about $1.9 billion.
However, not everyone is happy with Germany’s decision to sell its Bitcoin holdings.
Joana Cotar, a member of the German Bundestag, posted on X last month that the government should not sell Bitcoin, but should hold the token as a “strategic reserve currency.”
Kotal said she had written to German Chancellor Olaf Scholz, Finance Minister Christian Lindner and Saxony Minister Michael Kretschmer, telling them that selling Bitcoin “is not only unwise, but would It’s counterproductive.”
She said she has invited German officials to attend a lecture on October 17 at the Paul-Lobe-Haus building in Berlin with prominent Bitcoin influencer Samson Mow.
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