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

Member of the German Bundestag, Joana Cotar, has heavily critcized the government’s decision to “hastily” sell the bitcoin in its possession, urging it to develop a comprehensive bitcoin strategy.

“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,” the independent MP and bitcoin advocate wrote on Thursday, according to a translated X post.

Cotar said this was “not sensible” and “counterproductive,” inviting German Chancellor Olaf Scholz, Prime Minister Michael Kretschmer and Finance Minister Christian Lindner to a “Bitcoin Strategies for Nation States” event on Oct. 17, hosted by Samson Mow, CEO of bitcoin company Jan3.

Cotar also attached a letter she sent to Prime Minister Kretschmer on Thursday, in which she “urgently” requested the German government to “refrain from hastily selling the bitcoin in state possession.”

Cotar argued bitcoin offered an opportunity to diversify the state’s assets, reducing risk associated with traditional investments. She also suggested that due to bitcoin’s scarcity and deflationary nature, it can serve as a hedge against inflation and currency depreciation.

The MP claimed that a clear legal framework for bitcoin is in Germany’s self-interest and economic sovereignty, and hence contributes to the country’s technological and financial development.

“Instead of selling, I recommend developing a comprehensive bitcoin strategy,” Cotar concluded. “This could include maintaining bitcoin in the state treasury, issuing bitcoin bonds, and creating a conducive regulatory environment.”

Germany’s bitcoin transfers

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, it sent 1,700 BTC ($99 million) to the address "139Po." Arkham has yet to identify that address, but it could also belong to an exchange.

The German 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, it has sent approximately $269 million worth of the seized bitcoin to addresses labeled as belonging to crypto exchanges, with a further $350 million sent to the "139Po" address. However, it also appears to have withdrawn at least $86 million from known exchanges during the same period, Arkham’s data shows.

Bitcoin is currently trading for $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.