The Federal German Police, known as BKA, has recently transferred approximately 6,500 Bitcoin to two of the top cryptocurrency exchanges, sparking discussions about government Bitcoin holdings and the potential impact of selling off these assets. The movement of these digital assets, worth around 670 billion Yen, has led to speculation about a possible drop in Bitcoin’s price to $63,000.
Blockchain analysts at Arkham have identified the transfer of 6,500 BTC from a wallet associated with the German Federal Criminal Police Office (BKA). The Bitcoins were sent to a new address before being deposited in portions at the Kraken and Bitstamp exchanges, totaling an estimated 5 billion Yen. This move suggests a potential sell-off of the assets.
These Bitcoins were initially seized by the Saxony police in January from a suspected pirate website, with a total of 50,000 BTC confiscated during the operation, a significant acquisition for the German law enforcement agency.
This news adds to the ongoing conversation about government Bitcoin holdings. The United States currently holds the most Bitcoins among all governments, with an estimated 212,847 BTC reported as of April, an increase from the previously reported 207,189 BTC holdings.
In addition to the US, El Salvador is another country with a substantial amount of Bitcoin, holding 5,750 BTC as of early May. This follows their decision to adopt Bitcoin as legal tender in 2021, with the country launching its own proof-of-reserves website to track its Bitcoin holdings.
The intentions of the German police regarding the recently seized BTC, whether to sell or hold, remain unknown. However, many investors and analysts are monitoring the situation closely to see if Bitcoin’s price will drop to $63,000.
Currently, BTC is trading at $65,847 with a 1.08% increase in the past day. The market capitalization stands at $1.2 trillion, with a trading volume of $20.4 billion. Given the historical behavior of Bitcoin following significant government moves, a drop to $63,000 is conceivable, especially with market reactions to the potential liquidation of large Bitcoin holdings and recent outflows in the spot ETF market.
Despite the market dynamics, making firm predictions is challenging due to the inherent volatility of the crypto market. New research from Glassnode indicates that over 87% of Bitcoin investors are currently profitable, highlighting the resilience of the cryptocurrency market amidst fluctuations.