Bitcoin
German lawmaker demands strategic review amid Bitcoin sell-off chaos
April 27, 2023, Berlin: Joana Cotar (independent) addresses the 100th session of the German Parliament… [+] Bundestag. The debate is on the further development of skilled labour immigration. Photo: Jörg Carstensen/dpa Photo by Jörg Carstensen
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The German government recently stepped up its bitcoin liquidation by transferring approximately $75 million to exchanges such as Coinbase, Kraken and Bitstamp.
This was part of a larger strategy, with 315 million dollars in bitcoin sold since mid-June, bringing total sales to more than $390 million in less than a month. Germany’s Federal Criminal Police Office continues to sell bitcoin, signaling a potential plan to liquidate parts of its reserves. Despite market concerns, the transferred amounts represent a small portion of Germany’s holdings, leaving 40,359 bitcoins still in reserve.
However, in a surprising reversal, the German government recently moved back 1,915 bitcoins worth $111.5 million. This follows weeks of large-scale bitcoin sales that stirred market volatility. This reversal has sparked more questions and skepticism.
This strategy mirrors recent sales of confiscated bitcoins by the US government, raising concerns about the impact on the market, especially as payments to Mt. Gox creditors loom.
Joana Cotar, an independent MP, expressed frustration and concerns about the lack of a coherent strategy. She told Forbes: “I can only speculate about why the government is selling now. Given that we have huge budget deficits in Germany at the moment, that could be one of the reasons. The upcoming elections could also play a role,” Cotar noted. She highlighted the government’s apparent ignorance about the potential effects of its actions, adding: “I am not sure whether the government was or is aware of the consequences of its sales. It also does not seem to be aware that such sales are not necessarily carried out through stock exchanges, but rather No prescription.”
Cotar called for a strategic approach, emphasizing missed opportunities. She said: “I fear that the government does not have a strategy on how it wants to deal with bitcoin. That is why I asked for such a strategy in my letter to the government. We need to diversify our treasury and finally view and maintain bitcoin as a strategic reserve currency.”
As Germany sells its bitcoin, Wall Street is seizing the chance to buy the dip. “It’s really frustrating to have to watch politicians who have no idea about the issue waste a great opportunity,” Cotar reflected.
The German government’s ongoing bitcoin sales are being closely watched, with analysts predicting short-term market volatility. The strategic implications of these actions, both for Germany’s financial future and the broader cryptocurrency market, remain a critical area of debate.
As the situation unfolds, the bitcoin market will be watching to see how these large-scale government sales impact it and whether other nations will adopt similar strategies. Germany’s bitcoin sales highlight the need for a well-defined strategy in digital asset management, balancing immediate financial needs with long-term opportunities.
Several other countries hold significant amounts of bitcoin. In 2024, the United States will lead, followed by China and then the United Kingdom.
There are indications that countries like the United States are being advised on how bitcoin can be strategically integrated into national security and economic policy.
As the world watches Germany’s shift in bitcoin strategy, the actions taken by other nations will continue to shape the future of bitcoin’s adoption as a strategic reserve asset. The need for a cohesive, forward-thinking approach has never been more evident – we are seeing game theory in action.