In just three weeks, Germany has sold a swift 82% of its Bitcoin holdings, reducing its stack from more than 49,000 Bitcoin to a mere 9K. The German government’s Bitcoin wallet underwent massive back-and-forth interactions with leading crypto trading platforms including Coinbase, Bitstamp, and Kraken on July 11, momentarily causing its reserves to plummet below 5,000 Bitcoin. A surge of transactions that added back a portion of the sold amounts brought the German Bitcoin coffers up to over 9,000 Bitcoin again.
The initial Bitcoin holdings came from a huge crackdown on the film piracy site, Movie2k, back in January. Since June 19, the government’s Bitcoin wallet has processed an exodus of Bitcoin, worth billions. Transactions ramped up in July, with Bitstamp, Coinbase, and Kraken receiving around $615 million in Bitcoin. Blockchain firm Arkham noted that the Bitcoin was then allocated to two unknown addresses, believed to be institutional deposit or over-the-counter trading service providers.
German legislator and Bitcoin advocate, Joana Cotar, expressed disapproval of the extensive sell-off. According to Cotar, Bitcoin could offer the perfect “strategic reserve currency,” providing a buffer against uncertainties in the traditional system. This hefty sell-off, along with concerns about Mt. Gox beginning to recompense its creditors more than $8 billion in Bitcoin, has suppressed the BTC price over the past several weeks.
The flurry of bearish activity has pushed the Crypto Fear & Greed Index into the “Extreme Fear” zone, a first since January 2023. As of writing, Bitcoin is trading at $56,870, down 1.8% over the past 24 hours and 15.1% in the past month.