German Parliament Member Calls on Government to Cease Selling Bitcoin and Embrace Cryptocurrency Strategy
In a recent development, German parliamentarian Joana Cotar has advised the government to reconsider its rapid selling of Bitcoin and explore the option of incorporating the cryptocurrency as a strategic asset. Cotar recommends leveraging Bitcoin as a “strategic reserve currency” to not only diversify assets but also safeguard against inflation.
Since June 19, the German government has divested 7,583 Bitcoin, amounting to approximately $434.9 million at current valuations. These sales originated from a substantial seizure of nearly 50,000 BTC from the operators of Movie2k, a pirated movie platform, in January 2024.
The consistent selling by the government has coincided with a noticeable drop in Bitcoin’s value, plummeting from about $70,000 in mid-June to below $58,000 in early July. Cotar, an independent member of the Bundestag, expressed concerns over these negative market effects and called for a halt to the rushed disposal of state-owned Bitcoin.
In a communication directed to key government figures such as Federal Minister of Finance Christian Lindner and Chancellor Olaf Scholz, Cotar stressed the importance of refraining from hastily selling off state Bitcoin holdings. She argued that this approach was neither prudent nor beneficial for the country.
Cotar’s proposition extends beyond mere cessation of sales. She advocates for Germany to embrace Bitcoin as a “strategic reserve currency” to mitigate risks in the conventional financial system. In her letter, she suggested possibilities like retaining Bitcoin in the national treasury, issuing Bitcoin bonds, or establishing a favorable regulatory framework.
The legislator underscored multiple advantages of preserving and tactically managing the government’s Bitcoin reserves:
– Asset Diversification: Bitcoin could aid in diversifying Germany’s financial reserves, lessening vulnerabilities linked to excessive reliance on traditional assets.
– Inflation Protection: With Bitcoin’s finite supply and deflationary properties, it could function as a shield against inflation and currency devaluation.
– Economic Autonomy: A Bitcoin strategy might fortify Germany’s economic sovereignty and bolster its resilience to external financial uncertainties.
– Encouraging Innovation: Developing a Bitcoin-friendly legal environment could attract global talent and stimulate innovation in the financial technology sector.
– Enhanced Portfolio Performance: Research indicates that Bitcoin often delivers superior risk-adjusted returns compared to conventional investments in the long run.
Cotar’s stance echoes the rising acceptance of Bitcoin as a credible asset class among certain politicians and financial experts. She likened Bitcoin to “digital gold,” underscoring its potential value for national reserves. However, the actions of the German government paint a different picture.
As per findings from cryptocurrency intelligence platform Arkham Intelligence, the government has steadily transferred Bitcoin to prominent exchanges like Coinbase, Kraken, and Bitstamp, indicating intentions to sell off holdings. The most recent transfer on July 4 amounted to $172 million worth of Bitcoin directed to these exchanges.
The government’s selling strategy hasn’t escaped notice within the crypto community. Justin Sun, founder of Tron, extended an offer to acquire the remaining $2.3 billion worth of Bitcoin still held by the German government through an off-market arrangement, aiming to mitigate impacts on Bitcoin’s valuation.
The ongoing selling spree by the German government, coupled with other factors like the imminent Mt. Gox reimbursement plan, are believed to have influenced the recent downturn in Bitcoin’s value. The collective market capitalization of cryptocurrencies has experienced a substantial decline, prompting concerns among investors and market analysts.
