Why Did The German Government Sell Off 50,000 Bitcoin In 2 Weeks
The German government has sold all of its Bitcoin (BTC) in just two weeks. The reason for the substantial Bitcoin dump was unveiled in a recent statement by the Saxony Central Office for the Protection and Realization of Virtual Currencies.
Why Germany Sold All Its Bitcoin
In a blog post published on July 16, the Saxon Central Office and Frankfurt Bankhaus Scheich Wertpapierspezialist AG, a German securities trading bank, announced that they had successfully completed the sale of approximately 49,858 BTC. Starting on June 19, 2024, the German government began to sell off its massive Bitcoin reserves, officially concluding sales on July 12, 2024.
The government disclosed that the sale proceeds had amounted to €2.63 billion, with the funds remaining provisionally secured for the criminal proceedings related to the “movie2k” complex. The backstory behind the German government’s substantial Bitcoin holdings involves a digital asset seizure from movie2k, a notorious and now-defunct movie piracy website. Earlier in January 2024, the government seized 50,000 BTC, worth over €2.1 billion at the time, from the operator of the movie2k website.
Unlike some global jurisdictions that might hold onto the seized digital assets, German law mandates their liquidation. This mandate is part of an “emergency sale” under Article 111p of the Code Of Criminal Procedure. As a result, the Dresden Public Prosecutor Office had no alternative but to sell off their Bitcoin stash which was transferred by the accused at short notice.
Germany’s Bitcoin sale was also driven by its legal obligation to liquidate valuable assets before the conclusion of ongoing criminal proceedings, particularly when there is a threat or risk of significant loss. Considering Bitcoin’s notorious volatility and its penchant for rapid price fluctuations, the threat of loss was always present and, therefore, necessitated the sale.
Moreover, any speculation of prices or waiting on the rising value of the seized assets by the prosecuting authority is strictly prohibited in an emergency sale, which is expected to be carried out as quickly as possible. This is because the current value of Bitcoin and other price influential circumstances are irrelevant in deciding where and when to execute an emergency sale.
Germany Conducts Market-Friendly BTC Sale
During its blog post, the Saxony Central Office for the Protection and Realization of Virtual Currencies disclosed that the government had conducted a “market-friendly and appropriate sale of Bitcoins.” The government had initiated multiple BTC dumps in small tranches over a period of approximately three and half weeks, taking into consideration how substantial BTC sell-offs can significantly impact the market.
According to the government, approximately 49,858 BTC was transferred on January 16, 2024, representing a total value of €1.96 billion at the time, with an average purchase rate of about €39,400. Looking ahead, the price of Bitcoin was not severely impacted by the German government’s substantial lofty sell-off.
A crypto analyst, Simon Dedic revealed in an X post that the price of BTC has surged by almost 23% since Germany’s Bitcoin dump and is now trading at a higher level than on June 19 when the government began transferring funds.