Germany’s Bitcoin reserves have significantly decreased, with the government wallet holding just 9,094 BTC — a mere 18% of its initial amount — following several large transactions with cryptocurrency exchanges on July 11.
Major Transfers and Temporary Dip
On July 11, the German government’s Bitcoin wallet briefly dropped below 5,000 BTC after transferring 10,620 BTC (worth $615 million) to Coinbase, Bitstamp, Kraken, Flow Traders, and two anonymous addresses, according to blockchain intelligence firm Arkham. Some of these funds were later returned, raising the balance back above 9,000 BTC.
Background and Purpose
The Bitcoin in question was seized during a crackdown on the film pirating website Movie2k in January. Since June 19, the government has been actively transferring hundreds of millions in Bitcoin, with efforts intensifying in early July.
Speculations and Reactions
Arkham suggests the two anonymous addresses involved in the transfers likely belong to institutional deposit or over-the-counter trading service providers, though this remains unconfirmed.
The mass sell-off has drawn criticism from figures like Joana Cotar, a German lawmaker and Bitcoin activist. Cotar argued that Bitcoin should have been used as a strategic reserve currency to mitigate risks associated with the traditional financial system.
Market Impact
The sell-off, coupled with concerns that Mt. Gox may be liquidating more than $8 billion in Bitcoin to repay creditors, has led to a decline in Bitcoin’s price. This downturn has pushed the Crypto Fear & Greed Index into the “Extreme Fear” zone for the first time since January last year.
Bitcoin is currently trading at $56,870, reflecting a 1.8% drop over the last 24 hours and a 15.1% decrease over the past month.
In response to Germany’s actions, an Ordinals user sent an inscription to the government wallet, translating to “Taxes are robbery,” reflecting public frustration over the handling of the Bitcoin reserves.
