Bitcoin is also under selling pressure from the German government as well as bitcoin exchange Mt. Gox that collapsed.
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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 sharp selloff.
Last month, the German government began selling bitcoins from a wallet managed by the country’s Federal Criminal Police Service, referred to locally as the Bundeskriminalamt, or BKA.
The BKA sold 900 bitcoins in June — worth about $52 million as of Monday — from a massive collection seized from a now-defunct movie piracy site, according to on-chain data tracked by blockchain analytics firm Arkham Intelligence.
Last week the government sold an additional 3,000 bitcoins worth about $172 million. Then, on Monday, the German police sold another 2,739 bitcoinsor $155 million worth of the cryptocurrency.
The government sends its crypto reserves to exchanges like CoinbaseBitstamp and Kraken.
The German government was not immediately available for comment when contacted by CNBC on Monday.
Bitcoin price reaction
Alongside these sales, bitcoin has seen its price drop dramatically. Bitcoin it dipped below $55,000 on Friday, hitting its lowest level since February 2024, according to CoinGecko data.
At one point during the day, the entire crypto market had lost more than $170 billion in combined market capitalization in a 24-hour period, CoinGecko data showed.
Germany’s bitcoin sales aren’t the only concern for crypto investors. The cryptocurrency has also come under pressure from the billion-dollar digital currency payout by defunct bitcoin exchange Mt. Gox — which went bankrupt in 2014 — to creditors.
On Friday, the trustee for the bankruptcy estate of Mt. Gox, Nobuaki Kobayashi, said he had started making payments in bitcoin and bitcoin cash to some of the creditors through some 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 the total bitcoin token issuance.
There are about 19.7 million bitcoins in circulation today, worth $1.1 trillion, according to data from CoinGecko.
For investors, however, it’s all about how these sales affect market sentiment.
James Butterfill, head of research at crypto asset manager CoinShares, told CNBC that, while “relatively minor,” the bitcoin selloff “had an impact on market sentiment.”
The price of Bitcoin is still up 89% in the last 12 months.
Why Germany Holds $2 Billion in Bitcoins
In January 2024, police in the eastern German state of Saxony announced the seizure of nearly 50,000 bitcoins, worth about $2.2 billion at the time.
The haul was described by the Saxony police as “the most extensive seizure of Bitcoins by law enforcement in the Federal Republic of Germany to date.”
The funds were seized by the operators of Movie2k.to, a movie piracy site that went live in 2013, and transferred to a crypto wallet owned by Germany’s Federal Criminal Police Service.
According to Arkham Intelligence, which monitors movements from the German government’s bitcoin wallet, the tokens started moving as early as 2013, when they were initially seized.
Today, Germany’s BKA holds approximately 32,488 bitcoins. At current prices, the government’s holdings are about $1.9 billion.
However, not everyone is happy with Germany’s decision to sell its bitcoin holdings.
Joana Cotar, a member of Germany’s Bundestag, which is the country’s parliament, said in a post on X last month that instead of selling its bitcoin, the government should hold the token as a “strategic reserve currency.”
Cotar said it has written to German Chancellor Olaf Scholz, Finance Minister Christian Lindner and Saxony’s Minister to President Michael Kretzmer to tell them that selling bitcoins is “not only illogical, but counterproductive.”
He said he invited German officials to a lecture with Samson Mow, a prominent bitcoin influencer, on Oct. 17 at the Paul-Lobe-Haus building in Berlin.
