Germany Nears End of Bitcoin Liquidation, Holding Less Than 5K Tokens After Major Sales

Thursday's significant transfers to exchanges signal the near conclusion of Germany’s bitcoin sell-off.

The German state of Saxony is rapidly depleting its bitcoin (BTC) reserves, following another significant transfer of confiscated digital assets to crypto exchanges and brokers on Thursday.

Blockchain data from Arkham Intelligence revealed that wallets associated with German authorities moved a total of 10,567 BTC, valued at over $600 million, to various crypto exchanges, including Bitstamp, Coinbase, Kraken, and other service providers like Flow Traders and Cumberland DRW.

Post these transactions, the authority-linked wallets held just 4,925 BTC, worth approximately $285 million at current market prices. This is a significant drop from the initial 50,000 BTC, nearly $3 billion, which they began selling three weeks ago.

At the current rate, Germany's extensive bitcoin liquidation could conclude by Friday or early next week. So far, roughly 35,000 BTC have been sold this week alone.

Notably, the wallets exhibit an unusual behavior of receiving a portion of the transferred assets back from exchanges and brokers before the day's end, sometimes in amounts nearing $10 million. Greg Cipolaro, head of research at digital asset manager NYDIG, described this on-chain activity as "perplexing" in a note released on Wednesday.

The impending end of Germany’s $3 billion bitcoin liquidation could ease the anxiety of crypto investors, who have closely monitored these large on-chain movements, attributing recent price downturns to concerns over a supply glut.

Bitcoin has seen a 15% decline over the past month. This drop coincided with the U.S. government, which holds over $12 billion in seized bitcoin, moving $240 million worth of Silk Road-related BTC to Coinbase. Additionally, the estate of the defunct Japanese exchange Mt. Gox has begun repaying 140,000 BTC to creditors this month, many of whom might opt to cash out after a decade of waiting.

Despite fears of substantial sell pressure, Cipolaro from NYDIG suggested that these concerns might be exaggerated. He noted that bitcoin's decline has been more significant than the potential impact of the anticipated sales.