The German and U.S. governments have drawn attention after transferring millions of dollars worth of crypto holdings. On July 1, the German government moved 1,500 BTC, worth roughly $95 million, to multiple crypto exchanges. The U.S. government transferred 3,375 ETH, valued at $11.75 million, to an unknown address. These moves suggest strategic fund management.

German Government BTC Transfers

According to Arkham Intelligence, the German government has transferred 2,700 BTC to multiple exchanges over the last two weeks. The exchanges include Bitstamp, Coinbase, and Kraken. Currently, the German government holds 44,692 BTC, worth approximately $2.82 billion. On July 1, the German government moved 1,500 BTC, sending 400 BTC to major exchanges. On June 26, they transferred 750 BTC, with 250 BTC going to both Bitstamp and Kraken.

U.S. Government ETH Transfers

Arkham Intelligence data also shows that the U.S. government made significant transfers. The funds came from an address holding crypto seized from Estonian entrepreneurs Sergei Potapenko and Ivan Turogin. On June 30, the U.S. government moved 11.84 BTC, worth around $743,000, from another seized funds address. The recent transfer of 3,375 ETH represented the entirety of the U.S. government’s ETH holdings. These funds were moved to a previously unassociated address.

Market impact

Vijay Pravin, CEO of bitsCrunch, noted the market reaction to these transactions. “The price of BTC has slumped by 6% since the onset of government transactions,” he said. Investors are cautious about potential downside risks. Large-scale disposals by the German and U.S. governments could trigger a more pronounced downturn in Bitcoin’s price. Increased selling pressure and volatility are potential outcomes.

The European Union’s Markets in Crypto-Assets Regulation (MiCA) might influence Germany’s crypto transfers. MiCA aims to regulate stablecoins and crypto asset services. It is expected to have a substantial impact on the crypto market.

These frequent transfers by both governments reflect strategic management of their held funds. Germany seems to be liquidating some of its holdings on major exchanges. The U.S. government’s move of funds to an unknown wallet could suggest a shift in ETH fund management.

Vijay Pravin highlighted the market’s cautious stance. “There’s caution in the air among investors,” he stated. “Large-scale disposals by the German and U.S. governments could potentially trigger a more pronounced downturn in Bitcoin’s price.” This sentiment is shared by many in the crypto community.

Government strategies

The German government’s strategy appears to involve liquidating some of its Bitcoin holdings. By moving funds to major exchanges, they may be preparing for sales. This approach could be influenced by regulatory changes like MiCA. The new regulations could affect how governments manage and dispose of their crypto assets.

The U.S. government’s strategy seems different. By transferring ETH to an unknown wallet, they might be reorganizing their holdings. This move could indicate a shift in their approach to managing seized crypto assets. The reasons behind this shift remain unclear.

Regulatory context

The Markets in Crypto-Assets Regulation (MiCA) recently adopted by the European Union could play a role in these government transfers. MiCA aims to create a unified regulatory framework for crypto assets across the EU. It will affect stablecoins and crypto asset services, potentially shaking up the market.

Germany’s actions might be a response to these impending regulations. By liquidating some of its Bitcoin holdings, it could be preemptively adjusting to the new regulatory environment. This strategy might help it manage its assets more effectively under MiCA.

Also read: Mexico’s Crypto Community Prepares for Leadership Transition