German MP Urges Government STOP Bitcoin Sell-Off

German Member of Parliament Joana Cotar has called on the government to stop its rapid Bitcoin sell-off, arguing that the cryptocurrency could serve as a strategic reserve to protect against economic uncertainties and promote innovation.

• Joana Cotar, a German MP, criticizes the government’s Bitcoin sell-off.
• Cotar suggests Bitcoin could diversify treasury assets and hedge against inflation.
• The German government has sold 7,583 Bitcoin since June 19, 2024.
• Cotar invites government officials to a Bitcoin strategy event in October 2023.

Background

Joana Cotar, an independent member of the German Bundestag and a known Bitcoin advocate, has strongly criticized the government’s decision to sell a significant portion of its Bitcoin holdings. Cotar argues that this move is neither sensible nor productive, as Bitcoin could be used to diversify the country’s treasury assets and protect against currency devaluation.

Government’s Bitcoin Sales

The German government has sold 7,583 Bitcoin, worth approximately $434.9 million, since June 19, 2024. The latest sell-off occurred on July 4, 2024, with $172 million worth of Bitcoin transferred to cryptocurrency exchanges such as Coinbase, Kraken, and Bitstamp. Currently, Germany holds 42,274 Bitcoin, valued at around $2.4 billion.

Cotar’s Arguments

Cotar has urged the government to stop the hasty disposal of state-owned Bitcoin. She believes that Bitcoin could help Germany diversify its treasury assets, hedge against inflation and currency devaluation, and promote innovation. Cotar also highlighted that a further sell-off is counterproductive for the country.

Strategic Reserve Currency

Cotar has proposed that Bitcoin be adopted as a strategic reserve currency to shield against risks in the traditional financial system. She has invited key government officials, including Chancellor Olaf Scholz and Finance Minister Christian Lindner, to attend the “Bitcoin Strategies for Nation States” event in October 2023. The event aims to educate policymakers on the potential benefits of holding Bitcoin as part of national financial strategies.

Potential Benefits

Cotar suggests that a comprehensive Bitcoin strategy could include:

• Keeping Bitcoin in the state treasury.
• Issuing Bitcoin bonds.
• Creating a conducive regulatory environment for Bitcoin-based innovation.

Market Impact

The German government’s Bitcoin sell-off has contributed to increased market volatility. Bitcoin prices have experienced notable fluctuations, with the cryptocurrency currently trading at $57,810, down 6% over the last week and 18% over the last month. Critics argue that such large-scale liquidations by the government could have long-term negative impacts on the crypto market’s stability.

While the German government has not confirmed whether it plans to sell the rest of its Bitcoin holdings, Cotar’s call for a strategic reassessment highlights the ongoing debate over the role of cryptocurrencies in national financial strategies. As the global financial landscape continues to evolve, the potential benefits and risks of holding Bitcoin as a strategic reserve currency remain a topic of significant interest.