Germany’s influence on the crypto market continues to draw attention as it holds a significant amount of Bitcoin.
According to data from Arkham Intelligence, the largest economy in the Eurozone still possesses 39,826 BTC, valued at approximately $2.2 billion.
This pending coin stash represents around 9% of BTC’s 24-hour trading volume, which currently stands at $25.3 billion.
Such a substantial amount could potentially lead to further price turbulence in the market.
Germany’s Bitcoin Stash
The country’s substantial Bitcoin stockpile, worth approximately $3 billion, was confiscated from Movie2k.to, a movie piracy website.
In January, German police seized 50,000 BTC from the piracy website, marking it as the “most extensive security of Bitcoins by law enforcement authorities in the Federal Republic of Germany to date,” according to a press release.
Since mid-June, the German government has been gradually liquidating over 10,000 BTC, putting downward pressure on the cryptocurrency’s market rate.
The #German government transferred 1,000 $BTC($55.8M) out again 15 minutes ago, of which 500 $BTC($27.9M) was deposited to #Coinbase and #Bitstamp.
The #German government currently holds 38,826 $BTC($2.17B).https://t.co/h2JlBVFPsL pic.twitter.com/NS5pkMixrj
— Lookonchain (@lookonchain) July 8, 2024
The impact of Germany’s BTC sales has been evident in recent weeks, with BTC’s spot price experiencing a decline of nearly 20%, reaching $55,490, according to CoinDesk data.
In the past seven days alone, prices slipped by approximately 13%.
These market fluctuations have also affected the broader crypto market, as the CoinDesk 20 Index (CD20) dropped almost 14%, settling at 1,870 points within a week.
Recognizing the potential negative consequences, Tron founder Justin Sun made an offer to purchase BTC from the German government off-market.
Sun’s proposal aimed to mitigate the adverse effects on the spot price caused by large-scale sales.
However, it remains to be seen whether such an arrangement will be considered by German authorities.
Critics argue that Germany’s decision to sell BTC for fiat currency is a strategic blunder with geopolitical implications.
The Blockware Intelligence newsletter published on July 5 expressed concern, stating that it is unwise for any nation-state to sell bitcoin holdings for fiat currency, as the latter can be easily printed without limitations.
In contrast, Bitcoin’s scarcity and the significant energy required for mining make it a valuable and finite asset.
Bitcoin Miners Face ‘Capitulation’
Bitcoin miners are facing a critical phase known as “capitulation” as their profits diminish amidst the recent sell-off in the Bitcoin market.
In a recent post on X, market intelligence firm CryptoQuant revealed that the metrics measuring miner capitulation are nearing the levels observed during the market bottom following the FTX crash in late 2022, suggesting a potential bottom for Bitcoin.
Miner capitulation occurs when miners reduce their operations or sell a portion of their mined Bitcoin and reserves to sustain their operations, earn yield, or hedge their Bitcoin exposure.
Over the past month, CryptoQuant analysts have identified several signs of capitulation coinciding with a 13% drop in Bitcoin’s price from $68,791 to $59,603.
The ongoing sell-off by miners, coupled with sales from Bitcoin whales and national governments, has contributed to the recent price pullback in Bitcoin.
On July 5, Bitcoin plummeted to a four-month low of $53,499.
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