The Costly Consequences of Germany’s Bitcoin Sale
In July, the German government sold 50,000 seized bitcoins for $2.88 billion. However, these BTC are now worth $4.5 billion, resulting in a loss of $1.6 billion.
The United States has also missed out on an opportunity by selling 195,091 BTC for $366.5 million, which would now be worth nearly $17 billion, resulting in a loss of $16.6 billion.
Political figures such as Donald Trump and Senator Cynthia Lummis are proposing to hold on to seized bitcoins to establish a national strategic reserve, signaling a shift in government strategy toward digital assets.
The Costly Consequences of Germany’s Bitcoin Sale
In July, the German government liquidated 50,000 seized bitcoins from the shutdown of the movie piracy site Movie2K. The operation, carried out at an average price of $57,600 per bitcoin, yielded $2.88 billion. However, just four months after the sale, the value of Bitcoin skyrocketed following Donald Trump’s election as President of the United States. On November 11th, the cryptocurrency hit a new all-time high, surging by nearly $10,000 in a single day.
Today, these 50,000 bitcoins would be worth up to $4.5 billion, representing a 56% increase from the amount originally received by the German government. The decision to sell before the surge resulted in an estimated loss of $1.6 billion, a choice that many now view as a strategic mistake.
A Missed Opportunity: The American Precedent
Germany is not alone in letting go of potential huge gains by selling bitcoins too early. The United States has held 11 auctions of seized bitcoins over the past decade, totaling 195,091 BTC sold for a combined $366.5 million. According to data collected by Jameson Lopp, the CTO of Case, these bitcoins would now be worth around $17 billion, resulting in a monumental loss of $16.6 billion.
The sale policy of digital assets by governments has sparked debates about their long-term strategy. Donald Trump, during his preparation for the presidential term, signaled a potential change in approach. In July, he expressed his intention to prevent the sale of seized bitcoins and to establish them as the core of a national strategic reserve of Bitcoin. This measure aims to anchor Bitcoin as a component of the United States’ economic heritage.
A New Strategy: Governments Holding Bitcoin
Republican Senator Cynthia Lummis has recently proposed a bill that takes this logic further. She suggests that the US government purchases one million BTC, currently valued at $88 billion, and encourages states to do the same if they wish. According to her, establishing a strategic reserve of Bitcoin could strengthen the role of the US dollar on the global stage by adding a strong digital asset to the US financial arsenal.
The German mishap and past sales in the United States serve as a reminder that the management of digital assets by governments needs to adapt to the rapid market changes. The idea of a Bitcoin strategic reserve could redefine how governments perceive cryptocurrencies, not just as a means to recover funds but as a long-term strategic investment.
