The German government sold Bitcoin at $57,000, missing out on a potential gain of $230 million
Berlin – Details of a transaction disclosed by the German Finance Ministry recently show that the German government sold its holdings of Bitcoin for approximately $57,000 in 2022, missing out on a potential profit of about $230 million due to subsequent price fluctuations. This operation has triggered public discussions on the government’s asset disposal strategy.
The background of the sell-off: The routine handling of asset confiscation by law enforcement
According to a statement from the German Ministry of Finance, the Bitcoins sold this time were due to confiscation in a criminal case, and the cumulative holdings have not been disclosed. According to German law, cryptocurrencies confiscated by law enforcement agencies usually need to be converted into legal tender through public auctions to avoid valuation risks associated with long-term holding. When trading in 2022, the price of Bitcoin was at a relatively high level, but it had dropped by approximately 17% compared to its historical peak of around $69,000 in November 2021.
The contrast of returns under market fluctuations
The “timing controversy” of this sell-off stems from the subsequent rebound of Bitcoin’s price: in 2023, the price of Bitcoin once rose above $30,000, and in 2024, it even broke through the $60,000 mark. If calculated based on the peak in 2024, the German government might miss out on more than 230 million US dollars in profits. Opposition lawmakers criticized the move for “failing to optimize public asset returns” and questioned the government’s ability to judge the long-term trend of the cryptocurrency market.
The government’s response: Prioritize avoiding legal and market risks
When responding to the controversy, a spokesperson for the Ministry of Finance emphasized that the core principle for disposing of confiscated assets is “timeliness, legality and reducing uncertainty”. Holding cryptocurrencies for a long time may expose you to risks such as changes in regulatory policies and technical security vulnerabilities, while realizing asset liquidation through public auctions is in line with international common practices. In addition, the Bundesbank has repeatedly warned of the high speculative nature of cryptocurrencies before, and the government’s stance is in line with the regulatory tone of the central bank.
The underlying issues behind the controversy
This incident reflects the common difficulties faced by governments around the world in the management of cryptocurrency assets:
Valuation and disposal strategies: The high volatility of cryptocurrencies makes it difficult for governments to balance short-term liquidity demands with long-term earnings potential.
Regulatory and technological lag: The legal framework has not yet clearly defined the accounting treatment standards for cryptocurrencies as government assets, and in some countries, they are still classified as “liquid assets awaiting disposal”.
Public communication challenges: The timing of asset disposal in the market can easily raise public doubts about the government’s investment capabilities, especially in the absence of a transparent decision-making mechanism.
International Case Comparison
Such controversies are not unique to Germany: In 2023, the US Department of Justice sold over 40,000 confiscated Bitcoins, which also sparked discussions due to the selling price being lower than the subsequent market peak. In contrast, some countries have attempted innovative disposal methods – for instance, El Salvador has included Bitcoin in its national reserve assets, but its aggressive strategy is also accompanied by extremely high risks.
As of the time of publication, the German Ministry of Finance has not disclosed whether it holds any other cryptocurrency assets. As the cryptocurrency market gradually integrates into the traditional financial system, how governments scientifically manage such special assets may become a new topic in the global public finance field.
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