The German government has completed the divestment of its Bitcoin reserves, transferring its final holdings of 3,846.05 BTC, valued at $223.81 million, to Flow Traders and 139Po, prominent institutional deposit and OTC service platforms.
As of July 12, Arkham Intelligence data confirms that the German government now holds zero BTC, marking the culmination of weeks of intensified selling activities. This divestment exerted significant downward pressure on Bitcoin’s price, which struggled to surpass the $60,000 threshold during this period.
This recent transaction concludes a large-scale liquidation effort initiated by the German government. Over the past three weeks alone, approximately 50,000 BTC were sold, significantly impacting the market. Speculation suggests that this prolonged selling spree was a response to Bitcoin’s challenges in breaking through the $60,000 mark and its 200-day exponential moving average.
The BTC sold by the German government originated from a seizure in 2013, involving nearly 50,000 BTC seized from the operators of Movie2k.to, a film piracy website. The liquidation strategy, including a substantial single-day sale amounting to $900 million recently, aimed to deplete seized assets but inadvertently affected Bitcoin’s market value adversely.
Seized Assets and Strategic Liquidation
In January, Germany seized these assets, which were valued at approximately $2.8 billion in June. The aggressive liquidation approach, while depleting reserves, maintained high selling pressure, impacting market sentiment and prices.
These actions coincided with significant inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), absorbing approximately $801 million in BTC across four trading sessions.
Market Reaction and Future Prospects
Despite the conclusion of Germany’s Bitcoin sell-off, market pressures persist due to ongoing developments such as the $9 billion Mt. Gox repayment plan. These factors may continue to suppress Bitcoin prices in the short term, fostering an environment of fear, uncertainty, and doubt (FUD) within the market.
Nevertheless, optimism prevails among market experts anticipating a potential Bitcoin rebound. Recent positive inflation data and the cessation of Germany’s sell-off provide a more stable outlook. Additionally, the upcoming launch of Ethereum ETFs could inject new life into the ETF market, offering healthy competition and potentially aiding BTC’s recovery.
While the sell-off exerted substantial pressure on Bitcoin prices, the market anticipates stability and potential growth as it navigates the conclusion of this selling phase and embraces new financial products like Ethereum ETFs.