This week started with interesting news in the European crypto space. A report from the Akram platform, a database that tracks and records blockchain transactions, revealed that the German government, which currently holds over 45,000 Bitcoins, currently valued at approximately €1.95 billion, transferred about 5% of the popular cryptocurrency to the exchanges Kraken, Coinbase, and Bitstamp.
Since then, analysts and investors in cryptocurrencies, NFTs, and EFTs have been commenting on the potential market impact of these transfers, which, so far, are valued at €54 million. In this article, we will delve into the context behind the transfer and analyze the consequences of this large transaction for European crypto investors who hold not only BTC, but also cryptocurrencies such as Ethereum, Solana, Decentraland and others in their digital wallets or “wallets”.
The Origin of the Transaction
The news of the German government transfer left many investors on social media expressing a mix of surprise and concern. The surprise seems to stem from, until now, a little-known investment of a European government in cryptocurrencies. Although the German treasury is one of the largest holders of cryptocurrencies in the European Union, it is not alone in this investment. In fact, a report from Bitcointreasuries, a database that documents BTC transactions, revealed that the United States, China, and the United Kingdom surpass the German government in Bitcoin acquisition.
Although BTC has not yet been adopted in these countries as an official currency, examples of a similar financial experiment from El Salvador since 2021 may indicate that such adoption could indeed become a reality soon in Europe, the USA, the UK, and China. Contrary to El Salvador, the countries that are currently the largest holders of BTC have not invested in cryptocurrency mining, but acquired these funds through the surveillance of illegal transactions. For instance, the German government managed to accumulate over 50,000 BTC by seizing funds from an illegal streaming platform earlier this year.
Market Impact
Regardless of the form of cryptocurrency acquisition by governmental entities, the fact that these acquisitions exist can confer legitimacy on the crypto market and help popularize it among skeptics. Despite this positive aspect, the transfer received by the platforms Kraken, Coinbase, and Bitstamp from the German government this week also concerned European investors as it impacted the market by devaluing BTC, which is currently valued at €57,155, according to Coinbase.
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