In just three weeks, the German government’s Bitcoin reserves have plunged to 9,094 BTC, a sharp decrease to merely 18% of their initial holdings. This rapid reduction follows a series of substantial transfers to various digital asset exchanges on July 11.
A significant portion of Germany’s Bitcoin holdings came from tokens seized in January during a crackdown on Movie2k, a movie website engaging in film piracy.
Since June 19, the government has offloaded millions of dollars in Bitcoin, with a surge in these activities beginning in early July.
Germany Government Bitcoin Sell-Off
The government’s wallet reportedly fell lower than 5,000 bitcoins after several transfers.
Germany has transferred 10,620 bitcoins, worth approximately $615 million, to different crypto exchanges. Key ones include Kraken, Coinbase, Flow, Traders, Bitstamp, and other unknown platforms.
However, the wallet gained back 4,000 bitcoins, summing the total BTC holdings to 9,000 BTC after some of the transferred funds were returned.
Based on calculations, Germany now holds only 18% of the 49,857 BTC initially seized from Movie2k.
Meanwhile, Arkham, a blockchain intelligence firm, suspects that the unidentified addresses might be associated with institutional deposit services. The firm also suggested that the addresses may be connected to over-the-counter trading platforms, although this is yet to be confirmed.
This aggressive sell-off has sparked criticism from figures like German lawmaker and Bitcoin advocate Joana Cotar. Cotar suggested that using the bitcoin holdings as a “strategic reserve currency” would have been instrumental in evading risks in the traditional financial system.
Additionally, frustrations have surfaced within the Bitcoin community, with one Ordinals user inscribing a message that reads, “Taxes are robbery.”
Consequently, Bitcoin’s price has been reacting negatively to this sell-off. An analyst speculated that its recent falling price could result from Mt. Gox distributing over $8 billion in Bitcoin to its creditors.
The effect of these developments is also evident in the Crypto Fear & Greed Index, which stands at Extreme Fear for the first time since January last year.
Bitcoin Price Dip Calls for Long Positions
Meanwhile, the current price of Bitcoin holds at $56,870, a figure representing a 1.8% and 15.1% drop in the past 24 hours and month, respectively.
Bitcoin’s decline below $60,000 has triggered a rise in a “buy the dip” trend among traders. This term has been trending across various social media platforms, including Reddit, 4chan, Bitcoin Talk, and X.
This surge indicates a lively discussion among crypto traders about the current phase of Bitcoin’s bull market.
According to Santiment data, the frequency of buy-the-dip mentions on social media has doubled in just two days. The research firm’s analysis highlights that the community’s sentiment leans toward optimism, viewing the dip as a chance to invest.
However, Santiment advises a more strategic approach. They suggest that the best time to buy Bitcoin is when the market sentiment shifts from optimism to impatience and skepticism.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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