German Government Misses $2.3 Billion Bitcoin Gain After 80% Price Surge

The German government's decision to sell its Bitcoin holdings in the summer of 2024 has been scrutinized for its financial implications. The government sold 49,858 Bitcoin (BTC) worth over $2.89 billion at an average price of $57,900 across multiple transactions during June and July. This sale, which was executed through a wallet labeled "German Government (BKA)," has been identified as a missed opportunity worth over $2.3 billion.

According to blockchain intelligence firm Arkham, if the German government had held onto its Bitcoin, the holdings would now be worth $5.24 billion. This significant increase in value is attributed to the more than 80% rise in Bitcoin's price since the sale. At the time of the sale, Bitcoin was trading at around $57,900, but it has since surged to over $104,700.

The decision to sell the Bitcoin was not without controversy. The wallet's selling patterns indicated hasty transactions that were not optimized for minimal market impact or maximum profitability. Miguel Morel, founder of Arkham Intelligence, noted that the government's approach to selling the Bitcoin was unusual. "The last thing I would have expected is that they would just go to five different exchanges and start market selling," Morel stated. This strategy suggested that the government was prioritizing liquidity over market impact, which may have contributed to Bitcoin's downtrend during that period.

The German government's Bitcoin holdings were originally seized from the operators of Movie2k, a now-defunct pirated film site. The wallet first raised speculation of a potential sell-off on June 19, 2024, when it executed a 6,500 BTC transfer worth over $425 million. The wallet originally held around 50,000 BTC, and the government's decision to sell these holdings has been a subject of debate among financial analysts.

The reports surrounding the German government's Bitcoin liquidations may have had a more significant impact on Bitcoin's price than the actual volume of sold Bitcoin. Bitcoin's price recovered above the $60,000 psychological mark on July 14, a day after the German government-labeled wallet ran out of BTC. This recovery put an end to investor uncertainty about further selling pressure, indicating that the market had stabilized following the government's sale.