In Germany – thanks to the former Minister of Finance – the topic of selling bitcoins by the government has returned. The politician accused the current cabinet of not creating a strategic bitcoin reserve. But is he right and Germany should regret selling?
The sale that the entire market was afraid of
In the middle of the year, the cryptocurrency market feared bitcoin airdrops from German authorities. Analysts constantly monitored the changes in the composition of the bitcoin wallet that belonged to the German authorities (Saxony, to be precise).
But first, let’s go back to the beginning of this year. The German services then seized as many as 50,000 BTC that belonged to the platform with pirated films. At that time, these funds were worth USD 2.13 billion. The government completed its sale on July 13. He received approximately USD 740 million – USD 2.88 million in exchange for cryptocurrencies.
Already at this stage, I can say that the German authorities made a mistake: the sale became public, which caused a decline, larger than it should have been. Crowd psychology and an irrational fear of a crash were at work. If the services had acted smarter, they would have sold it quietly, without provoking any declines, and thus they would have received more for BTC.
There was a chance for the latter, because Justin Sun from Tron wanted to buy “German” coins as part of an over-the-counter transaction.
I am willing to negotiate with the German government to purchase all BTC off-market to minimize the impact on the exchange rate
– wrote on X.
However, the prosecutor’s office in Dresden did not enter into negotiations and in June ordered an “emergency sale” of bitcoins.
I will talk about why it was decided to sell in a moment. Now look at the data. Just look at the chart below to understand that the Germans sold bitcoins at a disastrous moment. The period of June and July was a time of consolidation, which ended with growth in the last quarter of the year. Currently, the German services would receive as much as USD 5.2 billion in exchange for “their” 50,000 BTC. Let me remind you that crypto assets were liquidated for USD 2.88 billion.
Stupidity or just law?
But why did the Germans decide to sell bitcoins at all? Couldn’t they – as former Finance Minister Christian Lindner has now suggested – create a bitcoin strategic reserve?
The law got in the way.
The sale of valuables prior to the conclusion of ongoing criminal proceedings is required by law whenever there is a risk of significant loss of value of approximately ten percent or more
– explained officials from the prosecutor’s office, adding that these conditions “are always met in the case of unstable (exchange rate) bitcoin.”
This announcement shows that German law prohibits offices from keeping assets that have been confiscated from criminals, but which are also exchange rate unstable.
Bitcoin price is rising
As we know today, shortly afterwards, after the November elections in the USA, the BTC price skyrocketed. In addition, Donald Trump announced that he plans to add cryptocurrencies to the US strategic reserve. Legally, Germany may have behaved appropriately, but as investors, officials failed across the board.
The latter is especially important in the context of Trump’s plans regarding the BTC reserve. If the US creates such a reserve (from its 200,000 BTC that it seized from criminals), other countries may follow in the same direction. Germany would immediately have a basis for creating its reserve. This also makes the issue political. Especially in the context of the fall of Olaf Scholz’s government and the renewed fight for a majority in parliament.
I don’t hear anything about it (Bitcoin and the blockchain market) in the central debates of the German Bundestag. What kind of negligence is this and what opportunities are we missing?
– Lindner thundered a few days ago during the parliament session.
We sold billions of bitcoins for half their current value. This is a decision that shows a lack of vision
– he added.
He was supported by, among others, Frank Schäffler, a politician who proposed adding bitcoins to the reserves of the European Central Bank and the German Bundesbank. It is possible that, just like in the USA, the BTC topic will be one of the leading topics during the election campaign in Germany.
Europe is waking up!
Some of the bitcoin awakening that we have seen in the US may now “spill over” to the Old Continent. We also see the first signals in our country. Sławomir Mentzen, the leader of New Hope, who is currently running for president, also promised to address the issue of cryptocurrencies. On his “presidential” website Mentzen25.pl we read, among others:
Cryptocurrencies are opposed in Poland because the state is unable to control them. As a result, companies trying to operate in this modern industry had to close down or leave Poland. Therefore, as president, I will strive to free up cryptocurrency trade and ensure that Poland has the most cryptocurrency-friendly law in the entire European Union, thanks to which we will become a European hub for companies in this industry. This will attract many modern companies to Poland and create well-paid jobs.
Additionally, he promised that as a politician he would strive to abolish the tax on profits that investors obtain on cryptocurrency exchanges.
Mentzen was followed by French MEP, Sarah Knafo, who announced that she wanted to create a bitcoin reserve in the European Union and at the same time block the issuance of the digital euro by the European Central Bank (ECB).
The new generation wants change
All the politicians mentioned here have in common that they are younger than their colleagues who are currently in power. Maybe this is where they understand the need for changes, including investments in BTC and blockchain technology.
But will “bitcoin” parties win elections now? In Poland, the Confederation remains – according to polls – the third political force, without which the next cabinet may not be able to govern. Then there may be a chance for cryptocurrency reforms in Poland.
We will probably also have to wait for the new deal in the European Parliament. There are many indications that Europe will follow the changes in the US – but it will be a few years late, which means an era in the market of new technologies.
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