German Government Resumes Selling Bitcoin as Prices Drop El Salvador Holds onto Assets

German Government Resumes Bitcoin Sell-Off as Price Drops, El Salvador Holds


By Ruholamin Haqshanas
Updated:
June 25, 2024, 07:44 EDT
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Reading time: 2 minutes


Amidst a recent decline in the price of Bitcoin, the German government has decided to resume the sale of its confiscated Bitcoin assets.
Germany, the largest economy in Europe, has started offloading a portion of its substantial Bitcoin holdings, which are valued at approximately $3 billion.
These assets were seized from Movie2k.to, a movie piracy website, in 2020.
In January, German authorities confiscated 50,000 BTC from the piracy website, making it the “largest seizure of Bitcoins by law enforcement authorities in the Federal Republic of Germany to date,” according to a press release.
Last week, the country sold around $325 million worth of Bitcoin, with the possibility of further sales in the future.
More recently, the German government transferred 200 BTC to Coinbase, while another 200 BTC were moved to Kraken from the same wallet.
Meanwhile, El Salvador continues to accumulate Bitcoin.
Since adopting Bitcoin as legal tender in September 2021, El Salvador has been steadily increasing its Bitcoin holdings.
As of the latest data, the country now holds approximately 5,748 BTC, which is valued at around $360 million.
El Salvador’s Bitcoin stash has been accumulated through direct purchases, mining, and investments from foreign entrepreneurs who are attracted to the country’s crypto-friendly policies.
The Salvadoran government has consistently added to its Bitcoin treasury, implementing a policy of purchasing 1 BTC daily.
This strategy has remained in place despite market fluctuations, demonstrating the government’s commitment to holding (“HODLing”) its Bitcoin assets for the long term.
It is worth noting that President Nayib Bukele has made it clear that the country will not sell its Bitcoin holdings, even as their value has significantly increased.
Recently, Bukele mentioned that the country’s Bitcoin investments have grown by over 40% in value.
The German government’s decision to sell off its Bitcoin assets coincides with a temporary dip in the price of Bitcoin, which briefly fell below the $60,000 mark.
Another event that could impact the market is the upcoming distribution of Bitcoin owed to former customers of the defunct cryptocurrency exchange Mt. Gox.
This distribution could involve up to 140,000 BTC entering the market.
Mt. Gox, which filed for bankruptcy more than a decade ago following multiple hacking incidents, has announced plans to return assets to customers starting in July.
The exact amount of Bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 BTC, potentially valued at up to $9 billion.
While concerns have been raised about the potential selling pressure caused by the influx of BTC, some argue that the impact may be overstated.
Creditors have had years to sell their claims if they needed immediate funds, which could mitigate the potential negative effects on prices.
Meanwhile, the digital asset investment products as a whole experienced a second consecutive week of outflows, totaling $584 million.
This pessimism among investors is believed to be influenced by concerns about potential interest rate cuts by the Federal Reserve.
Last week also saw the lowest trading volumes on ETPs globally since the launch of U.S. ETFs in January, with a total of only $6.9 billion traded throughout the week.
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