The German government intensified the sell-off of its Bitcoin holdings Tuesday and transferred a total of 282.74 BTC, valued at approximately $17.64 million, to major cryptocurrency exchanges Bitstamp, Coinbase, and Kraken.
The transactions took place at 4:20 p.m. Central Indonesian Time.
This follows a broader divestment trend by the German government, with over 3,000 BTC moved to centralized exchanges (CEX) in the past two weeks.
As of June 22, 2024, Germany's Bitcoin holdings were valued at $3.06 billion, with the Bitcoin price at $64,827 and a total quantity of 47.18K BTC. By July 2, 2024, these holdings had decreased to $2.89 billion as the price of Bitcoin slid to $62,671 and the wallet holdings had been reduced to 46.19K BTC.
Over the last 10 days, the German Government has sold nearly 1,000 BTC, decreasing about $163.5 million in Bitcoin holdings. The most recent transfer of 282.74 BTC further signifies the continued liquidation of Bitcoin assets.
Bitcoin's price has decreased from $64,827 to $62,671 over the same period.
The price decline and substantial sales suggest a strategic sell-off by the government to capitalize on high prices or adjust financial strategies.
The cumulative sale of over 3,000 BTC in two weeks indicates significant market activity by the German Government.
This trend of liquidating large amounts of Bitcoin could impact market sentiment and price stability, especially as these assets enter the broader market through major exchanges.
Commenting on the potential market impact, Raj A. Kapoor, Founder of the Blockchain Governance Council, told Decrypt that such significant movements can create uncertainty and fear among investors. A major entity like a government moving large amounts of Bitcoin could be interpreted as a lack of confidence in Bitcoin or a precursor to regulatory actions, prompting a sell-off, he added.
“This will result in short-term volatility as large transfers can cause short-term price fluctuations as traders react to the news. The actual impact will ultimately depend on current market conditions, overall liquidity, and how the news is received and interpreted by market participants,” he said.
Kapoor also addressed whether the government might hold onto some of its Bitcoin holdings for higher prices.
"If the government analysts believe that Bitcoin prices are likely to increase in the future based on market trends, economic indicators, and expert forecasts, they might choose to hold onto their holdings," he said. "Historical data showing Bitcoin's long-term growth potential might support this decision."
Edited by Stacy Elliott.