German MP slams government’s bitcoin sell-offs, urges holding as a strategic reserve

Joana Cotar, an independent member of the German Bundestag, has criticized the government’s decision to “hastily” sell its bitcoin holdings, urging for a comprehensive bitcoin strategy instead.

“Instead of holding bitcoin as a strategic reserve currency, as is already being debated in the USA, our government is selling on a large scale,” Cotar, a bitcoin advocate, wrote in a translated X post on Thursday.

Cotar argued that selling bitcoin is “not sensible” and “counterproductive,” and she invited German Chancellor Olaf Scholz, Prime Minister Michael Kretschmer, and Finance Minister Christian Lindner to a “Bitcoin Strategies for Nation States” event on October 17, hosted by Samson Mow, CEO of bitcoin company Jan3.

She also attached a letter sent to Prime Minister Kretschmer, urging the government to “refrain from hastily selling the bitcoin in state possession.” Cotar believes bitcoin offers an opportunity to diversify the state’s assets, reducing risks associated with traditional investments. Due to bitcoin’s scarcity and deflationary nature, it can serve as a hedge against inflation and currency depreciation, she added.

Cotar emphasized that a clear legal framework for bitcoin is in Germany’s self-interest and economic sovereignty, contributing to the country’s technological and financial development. She recommended developing a comprehensive bitcoin strategy, which could include maintaining bitcoin in the state treasury, issuing bitcoin bonds, and creating a conducive regulatory environment.

Recent Bitcoin Transfers by the German Government Ahead of Cotar’s remarks, the German government transferred another 3,000 BTC ($175 million) to various addresses on Thursday morning, according to Arkham data. The transfers included 500 BTC ($29 million) to Bitstamp, 400 BTC ($23 million) to Coinbase, and 400 BTC ($23 million) to Kraken. Additionally, 1,700 BTC ($99 million) were sent to an unidentified address.

The government-labeled addresses began sending bitcoin to crypto exchanges last month following the seizure of 50,000 BTC from the film piracy site Movie2k in January. Overall, approximately $269 million worth of bitcoin has been sent to addresses labeled as belonging to crypto exchanges, with an additional $350 million sent to the unidentified address. However, at least $86 million has been withdrawn from known exchanges during the same period, Arkham’s data shows.

Bitcoin is currently trading at $54,074, according to The Block’s bitcoin price page. The largest cryptocurrency by market cap is down 6% over the last 24 hours amid Mt. Gox bitcoin movements and has fallen around 17% since the German government began moving funds to exchanges on June 18.