How did Germany acquire Bitcoin?

In January 2024, police in Saxony, Germany, announced the confiscation of nearly 50,000 bitcoins, valued at approximately $2.2 billion at that time.

Saxony police described this as “the most extensive Bitcoin seizure by law enforcement authorities in the Federal Republic of Germany to date.”

The bitcoins were confiscated from the operators of Movie2k.to, a movie piracy site active in 2013, and transferred to a crypto wallet managed by Germany’s Federal Criminal Police Office.

Arkham Intelligence, which monitors the German government’s Bitcoin transactions, noted that the tokens started moving as early as 2013 when they were first seized.

Germany is selling its last Bitcoins

Last month, Germany started a series of staggered Bitcoin transfers to various exchanges, totaling 50,000 BTC.

According to blockchain data from Arkham Intelligence, Bitcoin wallets linked to German authorities transferred 10,567 BTC worth over $600 million last week. These transactions were made in multiple batches to crypto exchanges such as Bitstamp, Coinbase, Kraken, and service providers like Flow Traders and Cumberland DRW.

Following these transfers, the authorities' wallets held only 4,925 BTC, valued at $285 million at current prices. This is a significant decrease from the initial 50,000 BTC worth nearly $3 billion when they began selling three weeks ago.

Just days after the final sale, Germany's wallet balance dropped to zero. On 12 July, Arkham Intelligence reported on X that Germany sent 3,846.05 BTC to Kraken, resulting in a zero balance.

Did Selling Bitcoin Affect the Price?

The Dresden Public Prosecutor's Office initiated "emergency sales" of Bitcoin in June, anticipating a potential value drop of over 10%.

The office highlighted that enforcement agencies are prohibited from speculating on the value of seized items by waiting for prices to rise before selling. Instead, the emergency sales of 50,000 BTC aimed to secure funds for criminal proceedings against Movie2k.

Following the sale, Bitcoin prices surged by up to 16.55%. The Saxony government had the best chance to maximize returns in March when BTC reached a record high of around $74,000.

Will other countries follow Germany and Sell Bitcoin?

Last year, the US government sold a portion of its Bitcoin seized from Silk Road. On March 14, 2023, the government sold 9,861 BTC for $215.7 million, as noted in court documents filed on March 31. Out of the seized 51,352 BTC, the US government still holds 41,491 BTC.

Similarly, the United Kingdom holds substantial cryptocurrency reserves. Columnist Merryn Somerset Webb suggests that the new UK Finance Minister consider selling the government’s 61,000 Bitcoin reserves, equivalent to what the German government recently sold.

In contrast, countries like El Salvador are accumulating Bitcoin as a strategic reserve asset. El Salvador’s online Bitcoin treasury provides real-time data, showing that the nation officially holds 5,748 BTC, currently valued at approximately $360 million as of July 25, 2024.

Summary

In January 2024, Saxony police in Germany seized nearly 50,000 bitcoins, valued at $2.2 billion, marking the country's largest Bitcoin confiscation.

Recently, Germany transferred 50,000 BTC to exchanges like Bitstamp, Coinbase, and Kraken. By July, the authorities' wallet held no bitcoins, down from nearly $3 billion. Bitcoin prices surged by 16.55% post-sale.

The US and UK governments also hold substantial Bitcoin reserves, with the US selling some seized from Silk Road. There is no indication but they might wanna sell their BTC too someday and it will also affect the prices.