Germany Has Sold All 50,000 of Its Bitcoin
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the cliff-notes:
- Germany has sold all 50,000 of its bitcoin, worth $2.2 billion, over the past few days.
- Despite this selling event and other market pressures, bitcoin's price has remained stable, with strong buying from ETF issuers and spot market demand.
- This post argues that countries selling seized bitcoin are missing out on potential long-term gains and failing to hedge against fiat currency risks.
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Germany has sold all 50,000 of its bitcoin. It has dumped roughly 40,000 BTC in the last 4 days—that's $2.2 billion worth of bitcoin transferred to market makers and brokerages to sell into the market.
This comes at the same time that the transfer of 95,000 BTC to creditors who had their bitcoin stolen during the 2011 Mt. Gox hack is underway.
Despite all of this, bitcoin is holding up well. These downward pressures have all been negated by buying in the spot market.
As Germany has dumped this last remaining BTC beginning on July 8th, ETF issuers like BlackRock and Fidelity have bought ~$800 million BTC on behalf of their clients during the same period:
Imagine being +$1.6 billion in profit on your bitcoin that you got for free... and selling it all. In a roundabout way, you don't have to worry about the government seizing your bitcoin. They'll just sell it back onto the market for USD and go about their day. They don't understand what they own:
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Here's the damage denominated in US dollars. From $0 to $3.6 billion in seized BTC by the time we crested a new all-time high in March, back down to $0 today:
While nations like El Salvador are actively accumulating bitcoin, the top 5 balance sheets in the world got where they are by seizing BTC. El Salvador understands the value proposition of bitcoin, and how their balance sheet stands to thrive with BTC as a strategic reserve asset
Bitcoin has one of the best Sharpe Ratios of any investable asset over a 5-year time horizon. You are neglecting your fiduciary duty and your fiscal responsibility to the citizens of your country by ignoring an asset with such superior risk-adjusted returns.
Selling BTC as a sovereign is baffling. You will not be able to effectuate any meaningful change with the fiat you liquidate it into. The $3.6 billion in BTC sold by Germany isn't even enough to cover 18 days' worth of interest payments on the national debt in Germany. If the US sold its $11.9 billion in BTC, it would barely be enough to cover 3 days' worth of interest payments on the national debt.
These countries would be much better off holding what they've seized and allowing it to appreciate on the balance sheet than selling it for USD that it will burn through in just a few days' time:
For all of the selling being done by Germany and other sovereigns poised to do the same, the ETFs are about to lap their holdings a second time.
The global spot bitcoin ETFs now own 1,074 million BTC, which is more than double the 516,588 BTC held by countries after subtracting Germany's remaining holdings that it sold today. Larry Fink and Co. are allowing their clients to have exposure to absolute scarcity, a hedge against the global fiat currency hegemon that pillages savings and wrecks livelihoods.
If every sovereign just held this hedge on their balance sheet and was half as financially responsible as these ETF issuers, or the average long-term spot bitcoin investor, we may not have such a big problem on our hands:
Have fun staying poor, Germany. In the words of Tuur Demeester, Germany has lettuce hands, or as they call it:
Final thought: I suspect that Chief Bitcoin Strategist will be one of the most popular jobs of the next several decades for not only private and public companies, but nation-states as well. You'd better start building your resume.
Take it easy,
Joe Consorti
Theya is the world's simplest Bitcoin self-custody solution. With our modular multi-sig vaults, you decide how to hold your keys.
Whether you want all your keys offline, shared custody with trusted contacts, or robust mobile vaults across multiple iPhones, it's Your Keys, Your Bitcoin.
