Bitcoin has also been under selling pressure from the German government as well as collapsed bitcoin exchange Mt. Gox.
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For weeks now, Germany’s government has been selling hundreds of millions of dollars worth of bitcoin — and it’s been a key factor behind the cryptocurrency’s intense selloff.
Last month, the German government began selling bitcoin from a wallet operated by the country’s Federal Criminal Police Office, referred to locally as the Bundeskriminalamt, or BKA.
The BKA sold 900 bitcoins in June — worth approximately $52 million as of Monday — from a massive haul seized from a now-defunct movie piracy website, according to on-chain data tracked by blockchain analysis firm Arkham Intelligence.
Last week, the government sold an additional 3,000 bitcoins worth roughly $172 million. Then on Monday, German police sold a further 2,739 bitcoins, or $155 million worth of the cryptocurrency.
The government has been sending its crypto reserves to exchanges such as Coinbase, Bitstamp and Kraken.
The German government wasn’t immediately available for a comment when contacted by CNBC Monday.
Bitcoin price reaction
In tandem with these sales, bitcoin has seen its price fall dramatically. Bitcoin sank below $55,000 on Friday, hitting its lowest level since February 2024, according to CoinGecko data.
At one point in the day, the entire crypto market had shed more than $170 billion in combined market capitalization in a 24-hour period, CoinGecko’s data showed.
Germany’s bitcoin sales aren’t the only concern for bitcoin investors. The cryptocurrency has also been under pressure from the payout of billions of dollars’ worth of bitcoin from the collapsed bitcoin exchange Mt. Gox — which went bankrupt in 2014 — to creditors.
On Friday, the trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, said it had begun making repayments in bitcoin and bitcoin cash to some of the creditors through a number of designated crypto exchanges.
Hundreds of millions of dollars is a lot of money. But it’s a drop in the ocean if you look at bitcoin’s overall token issuance.
There are around 19.7 million bitcoins in circulation today, worth $1.1 trillion, according to CoinGecko data.
For investors, though, it’s all about how those sales are impacting the mood in the market.
James Butterfill, head of research at crypto asset manager CoinShares, told CNBC that, though “relatively minor,” the bitcoin sales have “affected market sentiment.”
Bitcoin’s price is still up a good 89% in the last 12 months.
Why Germany owns $2 billion in bitcoin
In January 2024, police in the eastern German state of Saxony announced the seizure of close to 50,000 bitcoins, worth around $2.2 billion at the time of the seizure.
The haul was labelled by Saxony police as “the most extensive seizure of Bitcoins by law enforcement authorities in the Federal Republic of Germany to date.”
The funds were seized from the operators of Movie2k.to, a movie piracy site that was active in 2013, and transferred to a crypto wallet owned by Germany’s Federal Criminal Police Office.
According to blockchain analysis firm Arkham Intelligence, which tracks movements from the German government’s bitcoin wallet, the bitcoin began moving as far back as 2013 when it was originally seized.
Today, Germany’s BKA holds roughly 32,488 bitcoins. At current prices, the government’s holdings are worth roughly $1.9 billion.
Not everyone is happy with Germany’s decision to sell its bitcoin holdings, though.
Joana Cotar, a member of the German Bundestag, said in a post on X last month that, rather than selling its bitcoin, the government should be holding the token as a “strategic reserve currency.”
Cotar said she has written to German Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Saxony Minister President Michael Kretschmer to tell them selling bitcoin “is not only not sensible, but counterproductive.”
She said she’s invited the German officials to a lecture with Samson Mow, a prominent bitcoin influencer, on Oct. 17 in the Paul-Lobe-Haus building in Berlin.