The German government seized a quantity of Bitcoin cryptocurrency from Movie2K, a film piracy website in January. Since it started selling off the confiscated bitcoin, prices have fallen by 15% with some fearing that the slump may continue.
Germany could be contributing to Bitcoin’s recent decline, with the government revealing that it has started auctioning off approximately €2.5 billion of bitcoin which it seized at the start of the year from Movie2K, a defunct pirated films website.
The sheer size of this sale has led to an unexpected inflow of bitcoin onto the market, contributing to falling prices over the last few weeks. Currently, Germany is fourth in the list of countries holding Bitcoin officially, following by the US, China and Britain.
The German government confiscated almost 50,000 bitcoin stored in a digital wallet, from Movie2k, in January. It’s thought to be one of the biggest seizures of its kind in Germany.
The proceeds of the German government’s auction are expected to go to the state of Saxony, leading to the seized cryptocurrency haul being nicknamed the “Saxon treasure.”
The price of Bitcoin has already fallen by more than 15% since the beginning of June and is currently trading at $57,612.92 (€53,233.76). Germany had started selling off this haul at the beginning of June, however, it still has about $1.9 billion worth of the cryptocurrency, or around 32,488 bitcoins waiting to be sold.
This has led to increased speculation amongst crypto traders and enthusiasts that Bitcoin prices might still fall further, once the remaining amount hits the market.
German government criticised for not holding onto seized Bitcoin
Ever since the German government has revealed that it was selling off this confiscated Bitcoin, it has also faced a significant backlash from critics and members of the government alike, who believe the move might be rushed or short-sighted.
Germany has also been urged to hold onto the cryptocurrency as an economic reserve for the future, given how an increasing number of global transactions are now being made using a variety of crypto. Furthermore, critics believe that this could be the perfect chance for the country to further develop its cryptocurrency strategy on a global basis and leverage the haul.
Other countries such as El Salvador have already gotten a head start in this, having made Bitcoin a legal tender back in 2021. However, a number of other countries such as the UK and the US have only recently stumbled upon large amounts of cryptocurrency in recent raids and investigations. Apart from this, these countries have not made many concrete moves to adopt crypto, apart from the US recently approving spot Bitcoin exchange-traded funds (ETFs).
In several other nations, including Morocco, China, Egypt and Bangladesh cryptocurrency remains banned.