The German government has officially emptied its Bitcoin coffers, marking the end of a 3.5-week long sale of nearly 50,000 BTC. This large-scale seizure and subsequent sale originated from assets confiscated in January 2024 from the operators of the illegal movie website movie2k.co. The sale generated a total of €2,639,683,413 (approximately $2.88 billion).

Over-the-Counter Transactions and Market Impact

German officials prioritised a cautious and measured approach throughout the sale process. To minimise market disruption, over 90% of the BTC was strategically sold via over-the-counter (OTC) transactions.

These transactions involve direct trades between the government and institutional buyers, effectively bypassing traditional exchanges. Furthermore, the sale was carefully divided into numerous smaller installments released over the course of the 3.5 weeks.

The German authorities claim that each individual OTC transaction represented a mere 1% or less of Bitcoin’s daily market volume at the time. This cautious approach aimed to ensure minimal market impact, preventing any sudden price swings triggered by a large influx of BTC hitting the exchanges.

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Transparency and Due Process

The sale was classified as an emergency sale, a legal term referring to the disposal of seized assets before the conclusion of ongoing criminal proceedings.

This decision highlights the German government’s commitment to recovering the value of the confiscated assets in a timely manner.

The Dresden Public Prosecutor’s Office released a statement emphasising that “the current daily value of the bitcoins and other unforeseeable circumstances that affect the price are irrelevant to the decision as to whether and when an emergency sale will take place.”

Market Fluctuations and Aftermath

While the German government strongly denies any direct influence on the market, the timing of the sale does match with a period of price volatility for Bitcoin.

When the sale began in June, Bitcoin was trading around $65,000, close to its all-time high. During the selling period, the price did dip as low as $53,905. However, at the time of writing this blog, Bitcoin had recovered to around $64,400.

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Looking Ahead: Holding Funds and Legal Proceedings

The proceeds from the sale will not immediately be allocated to the government budget. Instead, the funds will be held in custody until the legal proceedings associated with movie2k.co conclude. This ensures that any potential claims on the seized assets can be addressed before the funds are ultimately disbursed.

The German government’s sale of seized Bitcoin highlights the evolving relationship between governments and cryptocurrencies. The careful OTC approach highlights efforts to minimise market disruption during large-scale cryptocurrency sales.

Both cryptocurrency enthusiasts and traditional financial institutions should closely monitor the developments, as it offers valuable insights into the potential impact of government involvement in the cryptocurrency market.