Confiscated Bitcoin in January Sold in Portions
2.7 Trillion Won Still Remaining... Controversy Over Sale
Coin Investors Betting on Trump's Reelection
The German Federal Criminal Police Office (BAK) has drawn attention as a major player driving the decline in Bitcoin prices. Analysts suggest that the continuous large-scale sales of Bitcoins confiscated from illegal site operators in January by the German government are contributing to the ongoing downward trend in Bitcoin prices. With Germany’s financial difficulties worsening, it is expected that the government will continue selling for the time being, increasing the likelihood of further Bitcoin price declines.
"German Police Agency Sold Additional 3,000 Bitcoins This Month"... Leading the Downtrend
According to cryptocurrency media Cointelegraph, on the 9th (local time), blockchain analytics firm Arkham Intelligence reported that about 16,309 Bitcoins held by BAK were dispersed and moved to cryptocurrency exchanges. Considering the current Bitcoin price hovering around $56,000 (approximately 77.48 million KRW) per coin, it is expected that Bitcoins worth about $913.3 million (approximately 1.2638 trillion KRW) will soon be sold.
Following the sale of 900 Bitcoins last month, BAK sold an additional 3,000 this month, and with the anticipated sale of a much larger amount of 16,309 Bitcoins, concerns about further Bitcoin price declines are growing. Bitcoin prices have fallen about 25% since reaching a peak of $73,000 in March.
The building of the Federal Criminal Police Office (BAK) located in Wiesbaden, Hesse, Germany. [Image source=Federal Criminal Police Office (BAK) website]
BAK suddenly emerged as a major influencer in the Bitcoin market because it confiscated as many as 50,000 Bitcoins during the arrest of operators of illegal download sites in January. At the time, the market value of these Bitcoins was approximately $2.2 billion (about 3.0433 trillion KRW), a massive amount. Since last month, the German government has been moving the confiscated Bitcoins to various domestic cryptocurrency exchanges to liquidate them.
Arkham Intelligence pointed out, "The German government still owns 23,788 Bitcoins, valued at about $1.3 billion. It is expected to take about two more months to sell all of them and convert them into cash. The large volume of sales could lead to further price declines."
Continued Sales Amid Energy Price Surge... Controversy in Political Circles
The primary reason for the German government’s large-scale sale of confiscated Bitcoin assets is believed to be financial difficulties caused by soaring energy prices. In a situation where a tight budget is being prepared, there is a move to liquidate disposable assets as much as possible.
According to CNN, the Social Democratic Party (SPD), the Green Party, and the Free Democratic Party (FDP), which are forming the German coalition government, agreed on a draft budget for next year amounting to 481 billion euros (approximately 720 trillion KRW) on the 5th. This budget is reduced by 7 billion euros (about 10 trillion KRW) compared to this year after the Constitutional Court ruled the previous budget unconstitutional in November last year.
In particular, the SPD led by Chancellor Olaf Scholz attempted to declare a state of emergency due to the Ukraine war and increase government debt, but this was blocked by opposition from the FDP. As a result, the defense budget increase for next year was drastically cut from the 6.7 billion euros (about 10 trillion KRW) requested by the Ministry of Defense to 1.2 billion euros (about 2 trillion KRW).
However, some in political circles argue that the government should not sell all confiscated Bitcoins at current prices but hold onto them until prices rise. Joanna Kotar, a member of the German Bundestag, recently posted on X (formerly Twitter), stating, "The government should hold Bitcoins as 'strategic reserve assets' instead of selling them," and added, "I wrote letters to Chancellor Scholz, Finance Minister Christian Lindner, and Saxony Governor Michael Kretschmer, saying that selling Bitcoins is not only irrational but counterproductive."
Despite Flood of Sales, Investors Are Buying... Waiting for Trump’s Election?
Although a large volume of Bitcoin sales is flooding the market, investors who are hopeful for former President Donald Trump’s victory in the upcoming U.S. presidential election in November are scooping up Bitcoins, keeping the possibility of a price rebound open. Since Trump has pledged policies to protect cryptocurrency assets, there are even forecasts that Bitcoin prices will immediately surpass the $100,000 mark if he is elected.
According to The New York Times (NYT), Jeffrey Kendrick, head of foreign exchange and digital asset research at British investment bank Standard Chartered (SC), said, "Bitcoin could rise to $100,000 on the day of the U.S. election," adding, "If Trump wins, the regulatory and mining environment will become much more favorable, potentially pushing prices to $150,000 by the end of the year and over $200,000 next year."
Former President Trump included Bitcoin and cryptocurrency protection policies as key pledges in the 2024 Republican Party platform unveiled at the Republican National Convention on the 8th. The platform includes promises to halt the Biden administration’s crackdown on cryptocurrencies and guarantee all Americans the right to trade cryptocurrencies without government surveillance.
Trump also emphasized on social media that "We will protect the right to mine Bitcoin and guarantee the right to trade without government surveillance and control."
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