The German government's decision to sell off a significant portion of its Bitcoin holdings has caused substantial volatility in the cryptocurrency market. According to on-chain data from Arkham Intelligence, a wallet labeled as belonging to the "German Government (BKA)" has transferred approximately 16,309 Bitcoin (BTC), worth around $900 million, to various exchanges and market makers in a single day.
This massive sell-off has put downward pressure on Bitcoin's price, which dropped as much as 6.75% during the European trading session, falling from a high of $58,200 to as low as $54,278. The sell-off has also triggered widespread liquidations across the crypto market, with a total of $425 million in leveraged positions being liquidated, including $216 million in long liquidations.
The German government's Bitcoin holdings have decreased from 50,000 BTC in June to 23,788 BTC, now worth approximately $1.3 billion. The government confiscated nearly 50,000 bitcoins valued at around $2.2 billion at the time from a defunct pirated film website called Movie2K in January. Despite recent substantial sales, the Federal Criminal Police Office of Germany still retains approximately 32,488 bitcoins, valued at about $1.9 billion presently.
The German government's decision to sell off its Bitcoin holdings has been criticized by some, including German parliament member Joana Cotar, who urged the government to retain Bitcoin as a strategic reserve currency. However, the government maintains that it is selling Bitcoin in a way that is "fair and gentle on the market."
The ongoing sell-off by the German government, combined with the payout of billions of dollars from the collapsed Bitcoin exchange Mt. Gox to creditors, has contributed to the recent decline in Bitcoin's price. As the German government continues to liquidate its remaining Bitcoin reserves, there are concerns that this could lead to further downward pressure on Bitcoin prices.
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