Germany still holds $1.5B in bitcoin after surge of exchange transfers

In the film Die Hard, East German criminal mastermind Hans Gruber took over Nakatomi Plaza in a plot to steal over half a billion dollars in bearer bonds — worth $1.7 billion in today’s money.

Now, three and a half decades later, Germany is back, holding all of our attention hostage while it liquidates billions in bitcoin.

The bitcoin was seized earlier this year from the operator of Movie2k, the defunct piracy portal that shut down in 2013. Nearly 50,000 BTC was assumed by Germany, a $2.86 billion haul at current prices, $2.15 billion when reports first broke and reportedly around $25 million when Movie2k was at its height.

Overall, Germany has sent over $2 billion in bitcoin to trading platforms since June 16, per Arkham Intelligence data, including unidentified addresses assumed to be OTC desks.

Earlier this morning, addresses linked to the Bundesregierung altogether transferred 6,306 BTC ($361.3 million) to Kraken’s exchange, market maker Cumberland DRW and two other entities that appear to be connected to over-the-counter trading desks or other similar platforms.

Meanwhile, on Monday, the same addresses directed an eye-watering 16,038 BTC ($920 million) to Kraken, Cumberland DRW and other trading venues including Bitstamp, Flow Traders and Coinbase. 

The simplest explanation for those transfers is that the government is selling the seized bitcoin, as the US government does from time to time. 

But Germany’s wallets have also received bitcoin back from the trading platforms, totaling $508.6 million, valued at each time of transfer.

Take yesterday: Of the $920 million in bitcoin sent to trading platforms, about 15% of it was directed to Bitstamp, equal to around $134 million. 

Earlier this morning — two hours before Germany’s latest round of exchange transfers — government wallets received 1,692 BTC ($97 million) back from Bitstamp. Chunks of bitcoin have also been returned from Kraken, Coinbase and miscellaneous apparent OTC desks.

It’s unclear why Germany’s wallets follow these patterns, but perhaps most importantly, the outflows far outweigh the inflows to date.

If we surmise that any bitcoin that hasn’t made it back to German wallets has more than likely been sold for fiat, then Germany is so far more than halfway through liquidating Movie2k’s bitcoin.

A broad estimation suggests Germany may have generated up to $1.54 billion from 27,014 BTC, with an implied price of $56,800 per coin — 1% below its current trade price. US authorities sent a separate $241.2 million to Coinbase at the end of June.

Read more: US, German governments have sent $738M in bitcoin to exchanges over the last 2 weeks

Germany is still holding 22,846 BTC ($1.31 billion), which is definitely a lot of money. (For scale, CoinGecko reports about $32 billion in global daily bitcoin volume right now).

As with big spectacle liquidations like these, it’s difficult to say which has the bigger market impact: the actual sales or the chatter surrounding them. 

Bitcoin’s price has slipped as much as 15% since Germany started transferring to exchanges, but it’s hard to say whether Germany’s sales were directly responsible, especially so considering BTC is in the midst of a retracement following an all-time high in March.

The answer doesn’t really matter. The outcome is the same. What does matter is that Germany could turn out to be the least threatening bitcoin villain over the short-term.

Mt Gox still has over five times more bitcoin to distribute to creditors over the next few months, and directly to crypto exchanges, no less. 

The US government, meanwhile, is sitting on even more seized bitcoin — over 50% more than Mt Gox’s remaining stash — equal to $12.67 billion.

And a new threat could always emerge in the UK government, which itself has 61,245 BTC ($3.5 billion).

Yippee ki‐yay, bitcoin stacker.

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