Germany Still Holds $2.2B Worth of Bitcoin, Around 10% of Its Daily Trading Volume

Germany Still Holds $2.2B Worth of Bitcoin, Around 10% of Its Daily Trading Volume

Germany’s substantial Bitcoin holdings continue to draw significant attention, as the country maintains a considerable influence on the cryptocurrency market.

Germany’s Bitcoin Holdings

According to data from Arkham Intelligence, Germany, the largest economy in the Eurozone, currently holds 39,826 BTC, valued at approximately $2.2 billion. This amount represents around 9% of Bitcoin’s 24-hour trading volume, which is currently at $25.3 billion. Such a significant holding has the potential to cause further price volatility in the market.

Germany’s Bitcoin stockpile, initially worth around $3 billion, was confiscated from the movie piracy website Movie2k.to. In January, German authorities seized 50,000 BTC from this site, marking it as the most extensive Bitcoin seizure by law enforcement in Germany to date.

Since mid-June, the German government has been steadily liquidating over 10,000 BTC, exerting downward pressure on Bitcoin’s market price. The impact of these sales has been evident, with Bitcoin’s spot price experiencing a nearly 20% decline, dropping to $55,490 according to CoinDesk data. In the past week alone, prices have slipped by approximately 13%.

These fluctuations have also affected the broader crypto market, with the CoinDesk 20 Index (CD20) falling nearly 14%, settling at 1,870 points within a week.

Mitigating Market Impact

Tron founder Justin Sun has offered to purchase Bitcoin from the German government off-market to mitigate the adverse effects on the spot price caused by large-scale sales. However, it remains unclear whether German authorities will consider such an arrangement.

Critics argue that Germany’s decision to sell Bitcoin for fiat currency is strategically unwise with potential geopolitical implications. The Blockware Intelligence newsletter expressed concerns, noting that it is imprudent for any nation-state to sell Bitcoin holdings for fiat currency, which can be printed without limitations, unlike Bitcoin, which is finite and requires significant energy to mine.

Bitcoin Miners Face ‘Capitulation’

Bitcoin miners are currently experiencing a critical phase known as “capitulation,” as their profits diminish amidst the recent market sell-off. CryptoQuant, a market intelligence firm, revealed in a recent post that metrics measuring miner capitulation are nearing 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 activities, 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, combined with sales from Bitcoin whales and national governments, has contributed to the recent price decline in Bitcoin. On July 5, Bitcoin plummeted to a four-month low of $53,499.

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