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⚡Germany Retains 23,800 BTC Worth $1.3 Billion🪙

Croxroad

11 Jul 2024 — 4 min read

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🇩🇪 Arkham Intelligence

Germany's bitcoin (BTC) sales and Mt. Gox's reimbursements have recently shaken up the crypto market, and the drama may not be over yet. The Eurozone's biggest economy still holds 23,800 BTC worth $1.3 billion, according to data tracked by Arkham Intelligence. The pending coin stash, a potential selling pressure, represents nearly 5% of BTC's 24-hour trading volume of $25.3 billion, suggesting further price turbulence. Early this year, the German Federal Criminal Police Office (BKA) seized 49,857 BTC from the operators of Movie2k.to, a privacy website that was last active in 2013. Since mid-June, the government has liquidated over 10,000 BTC, putting downward pressure on the cryptocurrency's going market rate. It transferred an additional chunk of its holdings today.

BTC's spot price has declined by nearly 20% to $55,490 in four weeks, with prices slipping nearly 13% in the past seven days alone, according to CoinDesk data. The CoinDesk 20 Index (CD20), a broader market gauge, has dropped nearly 14% to 1,870 points in one week. Last week, Tron founder Justin Sun offered to purchase BTC from the German government off-market to reduce the negative impact on the spot price. Per some observers, Germany's BTC sales amount to a strategic blunder that puts the country at a disadvantage in geopolitical terms. "Foolishly, the German Government has transferred more than $390 million worth of BTC to exchanges over the past few weeks to be sold for fiat currency. From a geopolitical perspective, it is a strategic blunder for any nation-state to sell bitcoin holdings for fiat currency given that they can simply print the latter out of thin air," the July 5 edition of the Blockware Intelligence newsletter said.

"Comparatively, bitcoin is much more difficult to acquire given the immense amount of physical energy necessary to mine it and its limited supply of 21,000,000," the newsletter added. The recent market movements underscore the volatile and impactful nature of large-scale BTC transactions by governments and other significant holders. With Germany's actions stirring the pot and the anticipated Mt. Gox reimbursements looming, the crypto market is bracing for continued instability. As the debate over the strategic wisdom of such moves continues, market participants remain watchful for further developments that could influence BTC's trajectory in the near term.

🫨 CoinShares Report

A new report from CoinShares revealed a market buying opportunity amounting to $441 million in inflows for digital asset investment products in the last week. The July 8 report also highlighted an inflow into Bitcoin (BTC) amounting to $398 million. According to CoinShares, the weakness of Bitcoin prices, alongside activity from Mt. Gox and selling pressure from the German government, were the likely causes of investors’ buying sprees.

Inflows were primarily seen in the United States with $384 million, followed by Hong Kong ($32 million), Switzerland ($24 million), and Canada ($12 million), whereas Germany saw $23 million in outflows. Last week was significant for the defunct Japanese crypto exchange Mt. Gox. On July 5, it moved over 47,000 BTC, worth around $2.7 billion at the time, to an unknown wallet address as it began to repay its creditors. Repayments began in both Bitcoin and Bitcoin Cash (BCH) to select creditors via appointed cryptocurrency exchanges as outlined in Mt. Gox’s rehabilitation plan. Conditions for repayments included confirming the validity of the account and accepting the intent to subscribe to the Agency Receipt Agreement by designated crypto exchanges.

Some analysts have speculated that the majority of former Mt. Gox creditors could sell their Bitcoin, as its value has increased by over 8,500% since the exchange’s demise. During the same week, the German government moved 3,000 BTC, worth around $172 million at the time of writing, to various crypto exchanges and an unknown wallet. The CoinShares report also highlighted Bitcoin’s inflows, which amounted to around $398 million and represented roughly 90% of total inflows, with investors eying a “broader set of altcoins.” Solana (SOL) hit $16 million of inflows in the past week, making it the “best-performing altcoin,” with $57 million year-to-date. Ether (ETH) saw $10 million in inflows. Additionally, the Sentinel Action Fund doubled Solana donations to a pro-crypto political action committee, which supports four pro-crypto United States Senate candidates.

🔗 The Bottom Line

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