Bitcoin sales in Germany: 50,000 sold represent about 0.25% of supply

The German government is flooding the cryptocurrency market with Bitcoin. As of Wednesday, he has moved at least $615 million worth of Bitcoin to various cryptocurrency exchanges and market entities, according to data by Arkham Intelligence.

The government has sold the approximately 50,000 bitcoins seized in mid-January by police in Saxony, eastern Germany, worth $2.1 billion. The seizure was the result of a “voluntary transfer” by suspects accused of operating Movie2k.to, a movie piracy site that began operating in 2013.

On the chain data The article shows that bitcoins have been circulating in the wallet of the German government (BKA) since late January. At the time of publication, there are 13,111 bitcoins left in the wallet, worth about $759 million. This means that about 75% of the seized assets have been sold so far.

The prospect of $2.1 billion worth of bitcoin entering the market may have spooked some investors, as the German selloffs have coincided with recent price corrections. Bitcoin’s latest decline began on June 6, according to data from CoinGecko, which is when BKA’s outflows began to accelerate. Bitcoin has fallen about 19% since then and is now trading around $57,000.

There are indeed “market fears” about Germany selling its Bitcoin stash, admits Lennix Lai, OKX’s chief commercial officer. Selling pressure has been mounting Mount Gox Last week, as it began repaying $9 billion worth of Bitcoin to creditors, the US government sold off the seized Silk Road and Banmeet Singh coins.

“This is not only putting legitimate selling pressure on the market, but also telegraphing sales to the market, giving market participants the opportunity to sell in anticipation of these events occurring,” Zach Bruch, founder and CEO of crypto casino MyPrize, told Fortune. In other words, the anticipation of the sales only intensified their impact.

The overview

But taking a step back, 50,000 Bitcoin is only 0.25% of the total offer of the approximately 19,700,000 that have been mined so far. “While such sales can cause short-term volatility, the Bitcoin market tends to have enough liquidity to absorb them and bounce back fairly quickly. These sales are unlikely to trigger a sharp drop in the price of Bitcoin,” Lai told Fortune.

Fortunately, despite Bitcoin’s pullback in recent weeks, spot ETFs have received fresh capital, after weeks of outflows. Investors in these funds could slow the price slide. Since June 25, the funds have seen net inflows of $886.8 million, according to CoinGlass data.

Although central banks hold large foreign currency reserves (the United States holds at least $35 billion in euros and yen—the German government has opted for a massive selling policy. This decision has drawn criticism from the crypto community, not only because of the impact on supply and demand, but also because of the logic of the government selling bitcoins in exchange for euros. While the value of bitcoin has increased by more than 20,754% since 2015, the purchasing power of the euro decreases by 39% between 2000 and 2020. “Give it meaning,” said one X user wrote.

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