German Lawmaker Urges Government to Stop Bitcoin Sales and Adopt Cryptocurrency Strategy

Summary

• German MP Joana Cotar urged the government to halt its “hasty” sale of Bitcoin
• Cotar Suggests Using Bitcoin as a “Strategic Reserve Currency” to Diversify Assets and Protect Against Inflation
• The German government has sold 7,583 Bitcoins (worth $434.9 million) since June 19
• Cotar proposes to develop a complete Bitcoin strategy for Germany
• Government sell-offs of Bitcoin have contributed to recent price drops in the cryptocurrency market

A member of the German parliament has called on the government to end the current sale of Bitcoin and instead consider adopting the cryptocurrency as a strategic asset.

Joana Cotar, an independent member of the Bundestag, expressed concern over the government’s recent sell-off of Bitcoin, which has contributed to downward pressure on the cryptocurrency market.

Since June 19, the German government has sold 7,583 Bitcoin, worth about $434.9 million at current prices. These sales are a result of a significant seizure of nearly 50,000 BTC from the operators of Movie2k, a pirated movie website, in January 2024.

The government’s steady sell-off coincided with a notable decline in the price of Bitcoin, which fell from around $70,000 in mid-June to below $58,000 in early July.

In a letter addressed to top government officials, including Federal Finance Minister Christian Lindner and Chancellor Olaf Scholz, Cotar urged an end to what he described as a “hasty divestment of state-owned Bitcoin.” He argued that the sell-off was neither “reasonable” nor “productive” for the country.

Cotar’s proposal goes beyond simply blocking sales. He argues that Germany should adopt Bitcoin as a “strategic reserve currency” to protect itself from the risks of the traditional financial system. “Instead of divesting, I recommend developing a comprehensive Bitcoin strategy,”

Cotar said in his letter: “This could include keeping Bitcoin in the state treasury, issuing Bitcoin bonds, or creating a favorable regulatory environment.”

The regulator highlighted several potential benefits of maintaining and strategically managing the government’s Bitcoin reserves:

1. Diversification of activities: Bitcoin could help Germany diversify its treasury assets, reducing the risks associated with over-reliance on traditional currencies and investments.
2. Inflation hedge: Given its fixed supply and deflationary nature, Bitcoin could act as a hedge against inflation and currency devaluation.
3. Economic independence: A Bitcoin-based strategy could strengthen Germany’s economic independence and increase its resilience to external financial uncertainties.
4. Promoting innovation: Establishing a Bitcoin-friendly legal framework could attract top talent from around the world and foster innovation in the financial technology industry.
5. Improved portfolio performance: Studies have shown that risk-adjusted returns on Bitcoin often exceed those of traditional investments over the long term.

Cotar’s stance reflects a growing recognition of Bitcoin as a legitimate asset class among some politicians and financial experts. He likened Bitcoin to “digital gold,” noting its potential value for national Treasuries.

However, the actions of the German government suggest a different perspective.

According to cryptocurrency intelligence platform Arkham IntelligenceThe government has been steadily moving Bitcoin to major exchanges like Coinbase, Kraken, and Bitstamp, signaling an intent to sell. The most recent transfer on July 4 involved $172 million worth of Bitcoin sent to these exchanges.

The government’s sales strategy has not gone unnoticed in the cryptocurrency community. Tron founder Justin Sun recently offered to buy The remaining $2.3 billion in Bitcoin is held by the German government in an off-market transaction, intended to minimize the impact on the price of Bitcoin.

The ongoing sales by the German government, combined with other factors as expected Mt. Gox refund planhave been held responsible for the recent crash in the price of Bitcoin.

The overall cryptocurrency market capitalization has seen a significant decline, raising concerns among investors and market analysts.

Source