Why was the German government in such a hurry to sell its Bitcoin?

The German government sold billions of dollars worth of Bitcoin in recent weeks, but why were they in such a hurry? By selling so quickly, the German government did anything but optimize for the most profitability and the least impact on the market. The misery is now over and Bitcoin is already up ~$10,000.

Amateurish German government

According to Miguel Morel of Arkham Intelligence, the German government could have taken a completely different approach to selling Bitcoin. “There are days when there is $20 billion in Bitcoin volume. If the German government sells $60 million worth of Bitcoin, the impact is minimal,” Morel said.

If they had taken the step-by-step approach, it probably wouldn’t have been such a drama. Now, the German government’s haste only increased the panic. “It could also be that the news of the German government selling caused panic. Private individuals ran for cover and also sold $5 billion worth of Bitcoin in that panic,” Morel continued.

According to him, that is something we can learn from. Soon, Bitcoin from Mt. Gox will be on the market and that can cause a similar panic. In fact, with Mt. Gox, it is about much more Bitcoin.

Morel sees this as a potential opportunity to go long on Bitcoin, as the panic surrounding Mt. Gox’s BTC reaches a climax. “Like the German government’s transactions, they will eventually have no impact. That’s when I hope to open a long.”

Germany’s strange strategy

That they were in a hurry with the German government is also clear from the strategy. They created five accounts on different exchanges, where they then started dumping their Bitcoin.

In this way, they hoped to benefit from the different order books and reduce the impact on the market. “The last thing I expected was for them to go to five different exchanges and dump on the market. The fact that they did that, to me, looks like they were trying to use the liquidity of different order books.

But why not just stick to one exchange?”, Morel asks. Then they could have simply sold the Bitcoin in tranches, instead of opting for the gigantic dump we have seen now.

Then they might have made 10% or more capital from the sales. Now there are a lot of Bitcoiners who were able to buy more Bitcoin a little cheaper than expected.

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