Germany sold nearly 50,000 Bitcoins it owned earlier this year, and now it seems to regret it as the crypto surged to new heights where it is priced at over $2 billion. If the 49,858 BTC were sold at the current price, the value would have been $4.57 billion, much higher than the $2.8 billion it would have been if it had been sold at $53,000 per coin.
The move was undertaken under German law, which requires that any seized property, including Bitcoins if their market price is volatile by more than ten percent, be sold. The bitcoin in question was seized from Movie2k.to – a popular pirated movie site – in January 2024. At the time, it was the most significant Bitcoin seizure in Germany’s history.
In German law, authorities are obliged to dispose of assets and properties such as Bitcoins to reduce risks associated with fluctuations in the market. This regulation made it possible to sell 50,000 BTC, of which 49,858 were sold in the stipulated period, to fetch good fortune for the country. However, this timing of the sale, right at the time it was starting to attract volatility and appreciation, has cost the government a lot of lost opportunity.
Various factors have come to define the direction of the market price of the Bitcoin token, particularly reaching an all-time high of $93,434 in recent weeks, amongst them being market sentiment, particularly in the backdrop of the recently held U.S presidential election and the impact of the halving of the Bitcoins in early this year.
From this perspective, it is possible to concretize the connections between Bitcoin’s market surge and the halving effect.
Although the Source of Donald Trump’s Presidency may have brought optimism to the cryptocurrency market, the fundamental factor that pumped up the Bitcoin value, as claimed by most analysts, is the Halving Event that occurred in April 2024. Halving cuts the bounty for mining Bitcoin blocks from 6.25 BTC to 3.125 BTC, or the speed at which bitcoins are released into circulation. Through this particular supply shock, we see a phenomenon that tends to make its supply more scarce, bidding up the price of Bitcoin.
It has been pushed higher with the involvement of institutional investors, including legendary names like Michael Saylor, who have invested in Bitcoin through the MicroStrategy company. In the last two months, MicroStrategy bought another 27,200 BTC for $2.03 billion, making this company the largest corporate holder of BTC.
Germany’s Bitcoin Liquidation and Market Impact
Germany gradually initiated offloading its Bitcoin in mid-June, when more than 10,000 BTC was OFF. These sales affected the market price of Bitcoin due to the downward trend caused by these sorts of sales. When Germany’s last dump of its Bitcoin was offloaded, it was done before the 12th of July, with multiple transactions conducted across Bitstamp, Kraken, and Coinbase.
But after these sell-offs, the price of Bitcoin rose sharply and set a new all-time record high price in the months following Germany’s liquidation. The timing of sales now appears to have not targeted the actual apex of the rally in the German market, resulting in the government facing substantial value erosion.
The recent fluctuation in Bitcoin’s price has drawn some political concern in the political systems of European countries. The political figure of Germany, Joana Cotar, gave a basic prognosis of what can happen to the world economy if the US labels Bitcoin as a strategic reserve asset. She prescribed that trying to bring about such a change could trigger a chain reaction across European countries and that most countries could be quick to adopt Bitcoin as a reserve currency.
Suppose the U.S. decides to buy Bitcoin as a digital currency reserve. In that case, all the North European countries will experience the Fear of Missing Out (FOMO), Cotar quipped while discussing the growing global interest in Bitcoin as both a money and inflation hedge.
Therefore, given the current trends in the Bitcoin market, the early liquidation of Bitcoin in Germany can be implied to have been a major loss. Although the government acted legally to sell the seized assets, the decision to do it cheap may be viewed regretfully, as the Bitcoin rate reached unprecedented heights within months after the sale.
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