The German government has clarified the situation regarding the massive sale of bitcoins carried out in the last month.
According to the statement shared by the office of the Minister-President of Saxony, Sächsische Staatskanzlei, the sale of the almost 50.000 bitcoins that were seized during an investigation by German authorities in January, targeting German and Polish citizens who operated a hacking and money laundering, came amid the risks of volatility and short-term value loss of the cryptocurrency.
The government office explained that the more than $2.800 billion, which was obtained from the sale of 49.858 BTC, is provisionally secured for the criminal proceedings against the website “movie2k” at the Leipzig Regional Court. Although the case is still ongoing, the government emphasized that “the sale of assets before the conclusion of ongoing criminal proceedings is always legally mandatory if there is a risk of a significant loss in value of around ten percent or more.”
Thus, according to the authorities, due to market conditions, they were forced to carry out an “emergency sale” of the almost 50.000 bitcoins seized in January.
The authorities highlighted that the previous conditions were always met considering the volatility of the bitcoin price in the market.
The impact of the German sell-off on the price of Bitcoin
The massive sale of bitcoins that were held by the German government was successfully completed on July 12 together with the German Federal Criminal Police Office (BKA), after 3 weeks of starting this operation.
According to data from the Arkham Intelligence platform, this massive BTC liquidation took place between June 19 and July 12, marking an unprecedented milestone in the history of cryptocurrency seizures and sales by government authorities.
At the time of the seizure, the bitcoin stash was worth approximately $2.100 billion. At the time of the sale, $2.880 billion dollars were obtained, which represents an increase of 37%, with respect to the total value of the seized crypto assets.
The sale of BTC was carried out through Bankhaus Scheich, a specialized German financial institution, which was instructed to execute the operation in a "fair and smooth" manner in the market, as reported by the authorities in the recent statement. On the other hand, the authorities highlighted that the sale was carried out in multiple small parts over a period of three weeks with the aim of minimizing its impact on the price of Bitcoin.
According to data from the cryptocurrency price monitoring platform CoinMarketCap, the price of Bitcoin fell by more than 15% during the period of sale of bitcoins held by Germany. However, at the time of writing this article, the cryptocurrency shows a recovery in its price of more than 11% weekly.
Source: CoinMarketCap
Still, despite the precautions that the German government says it has taken and the current recovery in the price of BTC, this massive sale has generated an intense debate in the crypto community. On the one hand, experts argue that Germany may have missed a significant opportunity by selling all of its bitcoins, while others criticized the governments' handling of seized cryptocurrencies.
Germany receives small Bitcoin donations
Joana Cotar, a German MP and bitcoin advocate, argued that the government lacks experience in handling cryptocurrencies and that, instead of having sold its holdings, it should create small strategic reserves of Bitcoin as a first step towards a gradual implementation and better understanding the potential of blockchain technology.
Interestingly, after having sold all the bitcoins it owned, Germany has begun receiving small donations in the cryptocurrency made by the crypto community. At the time of writing, the BKA BTC address holds 0,007 BTC, valued at about $427 dollars, according to Arkham data.
Although these donations are insignificant compared to the bitcoins held by the government, they represent a wake-up call to the long-term potential of Bitcoin and a criticism of the decision to have sold holdings of the cryptocurrency.
At the time of writing, the price of Bitcoin is $64.022 per unit.
