Germany and the U.S. have recently transferred large amounts of Bitcoin to crypto exchanges.
This week, the U.S. transferred 3,940 Bitcoin (worth $240 million), which was seized from the convicted drug trafficker Banmeet Singh.
The crypto community fears that these government sell-offs might be bearish events for Bitcoin's price
Germany has also been selling for weeks, and it could worsen if both countries begin to sell.
Despite the recent transfer, the U.S. still holds a massive amount of Bitcoin (around 214,000 $BTC).
June, in particular, has seen world governments transfer thousands upon thousands of Bitcoin into crypto exchanges, which are likely to be sold.
Earlier last week, Germany championed the sell-off wave, transferring hundreds of millions into Coinbase, Kraken, and others on two separate occasions.
This week, however, the U.S. government joined the fray with a 3,940 Bitcoin transfer into a Coinbase Prime wallet, according to Arkham.
Is a sell-off incoming? Is Bitcoin at risk from here?
Arkham Intelligence revealed that this transaction from the U.S. government took place at 5:00 p.m. UTC, moving 3,940 Bitcoin, worth a staggering $240 million.
Arkham Intelligence noted that the bulk of this Bitcoin was seized from Banmeet Singh, a convicted narcotics trafficker who forfeited all of this $BTC at trial in January 2024.
British authorities arrested Banmeet Singh in London in 2019 on suspicion of selling and distributing drugs, before being extradited to the United States in 2023. According to the U.S. Department of Justice, Singh ran a drug smuggling network between 2012 and 2017 that included distributors across several U.S. states, including Florida, North Carolina, North Dakota, Maryland, New York, and Washington.
Singh was ordered to turn over 8,100 Bitcoin to U.S. authorities as part of his sentence. All of the Bitcoin was worth over $150 million at the time, and the U.S. Drug Enforcement Agency (DEA) described this seizure as the most significant crypto bust the agency has ever carried out in its history.
As of April 2024, Singh has reportedly been freed from prison after being sentenced to five years and is set to return to his home country of India.
This most recent transfer of Bitcoin from Germany and now the U.S. has sparked fears of a market sell-off in the crypto community, with the German government's sell-off intensifying so far.
According to data from Arkham intelligence, while the German government had upwards of $3 billion in its coffers as of last week, we are now looking at a $2.7 billion remaining balance, as shown in the snapshot below:
The German government's sell-off
According to Arkham, the U.S. government still holds a sizeable amount of Bitcoin, which has been gathered over the years through seizures and asset forfeiture. Its current account balance is roughly 214,000 Bitcoin, worth around $13 billion.
This means the U.S. is one of the largest state Bitcoin holders and could present serious challenges for the crypto market if it joins Germany's selling spree.
At the time of writing, Bitcoin is just under the $61,000 price level and shows increased sensitivity to sharp market sell-offs.
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