German Government Still Holds Over $2B in BTC despite Selloff, Crypto Analyst Criticizes Strategy

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As a seasoned crypto investor, I find the actions of the German government concerning and disappointing. The continuous selling of their Bitcoin holdings has put significant pressure on the market, leading to another dip in Bitcoin’s price. With almost 9% of the daily trading volume being accounted for by the German government’s holdings, the impact on the market is substantial.

Over the past several weeks, the German government has disposed of some of its Bitcoin holdings, resulting in increased selling and a negative impact on the cryptocurrency market’s trend. Despite this, as reported by Arkham Intelligence, the government retains approximately 38,826 Bitcoins, equivalent to around $2 billion in value.

The significant Bitcoin holdings of the German government presently represent approximately 9% of the cryptocurrency’s daily trading activity. Consequently, should they decide to sell, the ensuing selling pressure could potentially induce a further decrease in Bitcoin’s value.

As a researcher, I’ve uncovered that the German Federal Police Agency (BKA) seized control of approximately 49,857 Bitcoins from the operators of Movie2k.to, an infamous website for pirated content that was operational until 2013. Post-seizure, the German government has initiated the sale of these digital assets. Since mid-June this year, they have successfully disposed of 10,000 BTC. The plans for utilizing the remaining holdings have yet to be disclosed.

Experts Criticize Germany’s Approach to Bitcoin Asset Management

Crypto critics have voiced their concerns over the German government’s persistent selling of Bitcoin, claiming it negatively influences the larger digital currency market. Justin Sun, founder of Tron, has publicly proposed negotiating with the German authorities to purchase all their Bitcoin holdings in an attempt to mitigate market disruptions.

Joana Cotar, a German Member of Parliament, has publicly criticized the government’s plan to sell a significant amount of its digital assets. In her post on platform X, she expressed her disagreement with this move, stating that while other nations are keeping their crypto holdings, Germany is selling off large quantities. She deemed this action as not wise and counterproductive.

As a financial analyst, I would advise against adopting a strategy to hoard Bitcoin as a reserve currency, a topic currently under consideration in the US. Instead, my recommendation for our government would be to sell off a significant amount of this cryptocurrency.

In response to X’s post that Cotar made, she attached scans of a letter she penned and dispatched to Prime Minister Kretschmer on July 4. The content of this letter appealed for the German administration to halt the hasty disposal of the nation’s Bitcoin holdings. She emphasized that investing in Bitcoin offers Germany an opportunity to broaden its financial portfolio, thereby reducing the risks inherent in conventional investments.

In a recent article by Blockware Intelligence, the German decision to sell their Bitcoins was criticized as a misstep. The authors argued that it is unwise for a country to exchange its Bitcoin holdings for traditional currency. They emphasized that acquiring Bitcoin is more complex than generating fiat money, which can be produced in large quantities on demand. Instead, they suggested that nations should consider keeping Bitcoin as a valuable strategic asset.

As a crypto investor, I can tell you that Germany’s indecision regarding the disposal of its Bitcoin holdings creates uncertainty in the market. If the country ultimately decides to sell more of its reserves, this additional supply could put downward pressure on the price of Bitcoin.

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2024-07-08 14:07