German gov’t $354M BTC sell-off: Yet more volatility incoming?

Update July 10, 12:30 pm UTC: This article has been updated to add quotes from Dr. Lennart Ante.

The wallet labeled German Government (BKA) on Arkham Intelligence has loaded up 6,000 more Bitcoin worth $354 million in preparation for the next round of BTC sell-offs.

So far, 5,853.409 Bitcoin BTCUSD has been sent to addresses associated with exchanges such as Coinbase, Kraken, Flow Traders and other unidentified or unconfirmed addresses.

The next attempt to offload roughly $342 million worth of BTC has begun.

Ongoing BTC sell-off

This ongoing distribution of the 6,000 BTC follows the outflow of 3,100 BTC worth $178 million (at the time) on July 9.

Incidentally, the address also withdrew 1,700 BTC worth $91.78 million from Bitstamp, recouping its BTC holdings and indicating an inability to off-load them on the exchange.

On July 9, the holdings stood at around 26,000 BTC, worth roughly $1.5 billion, with a linked address used to off-load the funds holding 4,800 BTC.

As of July 10, the wallet’s current holdings are only around 18,110 BTC, now worth $1.06 billion — down over $400 million since July 9.

Related: German gov’t prepares for next $276M BTC sell-off

Saxony seized funds

Speaking with Cointelegraph, Dr. Lennart Ante, the CEO of Blockchain Research Lab, explained that investigators from the federal state of Saxony seized the BTC funds.

Ante explained that the funds “are said to have originated from the illegal streaming portal” Movie2k and that one of the defendants “is said to have facilitated the voluntary transfer” of the funds.

“The Public Prosecutor General’s Office has sole authority over the confiscated Bitcoins. The BKA (German State Police) just provides the wallets through which the transactions are processed.”

Ante detailed the proceeds of the funds, stating that:

“They go to the state budget of the Free State of Saxony. However, victims of the movie2k portal, i.e., filmmakers, could have a claim to parts of it. This will have to be decided by the courts.”

Related: German gov’t transfers another $900M in Bitcoin, adding to BTC’s selling pressure

Method of sale, lost of BTC billionaire status

Despite the ongoing sell-off and the dumping of over $1 billion in BTC into the market so far, the price of BTC has steadily risen back to highs of $58,000 after hitting lows of $53,900.

Ante explained that the ongoing events raise questions about whether the Saxon government’s sales strategy is efficient.

“Perhaps auctions or OTC deals would be more efficient. However, we can only speculate about this at present. If Bitcoin wants to live up to its role as a global financial asset and digital gold, the market must be able to withstand such events.”

Of reportedly almost 50,000 BTC seized by the Public Prosecutor General’s Office, only around 13,110 BTC worth $770 million remain. This has resulted in the reported German government losing its BTC billionaire status.

The Code of Criminal Procedure (StPO) § 111p outlines the procedure and regulations for an emergency sale of confiscated or seized objects during criminal investigations in Germany.

It details that objects confiscated under § 111c or seized under § 111f can be sold if there is a risk of significant loss of value, threat of spoilage, or costs or difficulties associated with storage, maintenance, or upkeep.

Bitcoin market narrative and sentiment

The BTC sell-off by the reported German government address coincides with the Mt. Gox initiation of the long-awaited BTC and Bitcoin Cash (BCH) repayments to creditors.

Discussing the market narrative and sentiment, Ante said that the ongoing event “may be forgotten in a few months, and new events, such as the Mt. Gox payouts, may be the subject [of] debate.”

“Such sales likely lead to an even broader distribution of Bitcoin ownership, so the whole event may be positive for Bitcoin in the medium term.”

At the time of writing, BTC’s price is $58,545, and the total cryptocurrency market capitalization is $2.15 trillion, up 1.39% over the last 24 hours.

German gov’t $354M BTC sell-off: Yet more volatility incoming?

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