Germany’s $2 Billion Bitcoin Holdings Spark Investor Concerns Amid Selloff

For weeks, Germany’s government has been offloading hundreds of millions of dollars worth of bitcoin, causing significant concern among cryptocurrency investors and contributing to a sharp selloff in the market. Last month, the Federal Criminal Police Office (BKA) began selling bitcoin from a massive haul seized from a now-defunct movie piracy website.

In June, the BKA sold 900 bitcoins, worth approximately $52 million. Last week, an additional 3,000 bitcoins, valued at around $172 million, were sold. On Monday, German police sold a further 2,739 bitcoins, equating to $155 million worth of the cryptocurrency. These substantial sales have coincided with a dramatic drop in bitcoin’s price, which fell below $55,000 on Friday, its lowest level since February 2024. The entire crypto market saw a significant loss, shedding over $170 billion in combined market capitalization in a 24-hour period.

Germany’s bitcoin sales aren’t the only issue weighing on the cryptocurrency. The payout of billions of dollars worth of bitcoin from the collapsed bitcoin exchange Mt. Gox to creditors has also put pressure on the market. The trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, confirmed that repayments in bitcoin and bitcoin cash have begun through several designated crypto exchanges.

Despite the large sums involved, these sales are relatively small compared to bitcoin’s overall token issuance. In January 2024, police in the eastern German state of Saxony seized close to 50,000 bitcoins, worth around $2.2 billion at the time. This was the most extensive seizure of bitcoins by law enforcement in Germany to date. The funds were confiscated from the operators of Movie2k.to and transferred to a crypto wallet owned by Germany’s Federal Criminal Police Office.

Today, the BKA holds approximately 32,488 bitcoins, valued at roughly $1.9 billion. However, not everyone agrees with the government’s decision to sell its bitcoin holdings. Joana Cotar, a member of the German Bundestag, argued that the government should hold bitcoin as a “strategic reserve currency” instead of selling it. Cotar has reached out to German Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Saxony Minister President Michael Kretschmer, calling the decision to sell bitcoin “not sensible” and “counterproductive.” She has invited these officials to a lecture by prominent bitcoin influencer Samson Mow on October 17 in Berlin to discuss the matter further.