The recent sale of Bitcoin by the German government has stirred significant attention in the crypto market. This large-scale divestment created downward pressure on Bitcoin’s price, contributing to a prolonged bearish trend throughout June, with prices consistently trading below the 200-day moving average. However, there’s now a silver lining: the German government has completed its full Bitcoin disposal, potentially clearing the path for a market rebound. Signs of recovery began emerging around July 14, offering renewed optimism for long-term investors.
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How Did Germany Acquire 50,000 Bitcoin?
In January 2025, authorities in Saxony, eastern Germany, seized nearly 50,000 Bitcoin linked to the operators of Movie2k.to, a notorious piracy website active since 2013. The confiscated assets were transferred to the Federal Criminal Police Office (BKA), placing Germany in control of one of the largest state-held BTC reserves in recent history.
This raised a critical debate: should the government treat these seized digital assets as part of a strategic reserve, similar to gold or foreign currency holdings? Some members of parliament advocated for holding the Bitcoin long-term, citing its potential as an inflation hedge and diversification tool. However, after months of deliberation, the government decided to liquidate the entire stash.
The sale was executed over a short period — from June 19 onward — and completed within weeks. While this move generated short-term market volatility, it also removed a persistent overhang of supply that had weighed on investor sentiment.
Other Major Sellers Impacting the Market
Germany wasn’t the only major player unloading crypto assets. Two other entities have significantly influenced market dynamics:
- Genesis Global Capital – A subsidiary of Digital Currency Group (DCG) and sister company to Grayscale Investments – has been selling off its holdings to repay creditors following its 2023 bankruptcy filing. The firm holds over 33,000 BTC and 113,000 ETH, with ongoing sales expected to continue through 2025.
- FTX Exchange – Although bankrupt since 2022, FTX is preparing to compensate victims with billions of dollars, up to 40–50% of which may re-enter the crypto market. Unlike the slow repayment process seen with Mt. Gox, FTX’s compensation will be delivered primarily in cash between October and November 2025, potentially triggering strong buying pressure as recipients reinvest.
This contrasts sharply with the Mt. Gox case, where repayments have been delayed for years and failed to meet market expectations — highlighting how different recovery approaches can affect market psychology.
Positive Signals Amid the Selling Pressure
Despite heavy selling from institutional sources, several bullish indicators suggest that the market may be nearing a bottom:
- Spot Bitcoin ETFs are seeing net inflows: Just last week, over 3,300 BTC flowed into spot ETFs — and this was before BlackRock released its latest financial report, which could spark even greater institutional interest.
- Binance’s Bitcoin reserves are rising: During this bear market phase, Binance has accumulated approximately 41,000 BTC, signaling strong confidence from one of the world’s largest exchanges.
- Bitcoin halving cycle patterns hold: Over 547 days have passed since the last halving event. Historically, prices peak before the halving and enter a correction phase afterward. We’re now well into the accumulation phase of the cycle — a period often favorable for long-term investors.
- Fear & Greed Index shows extreme fear: In early July, the index dipped into “extreme fear” territory — a sentiment that historically precedes market reversals and presents strong buying opportunities.
- Whale activity is increasing: The number of wallets holding more than 10 BTC continues to grow. Meanwhile, short-term holders are exiting at breakeven points after previous losses — a sign of capitulation that often marks turning points.
Market Sentiment Shift: From Speculation to Accumulation
In Q1 2025, Bitcoin surged from $40,000 to $70,000, fueling intense speculation. During that period, short-term traders were highly active, while long-term holders gradually reduced their positions. But as prices corrected in June and July, the trend reversed.
Now, long-term investors and whales are actively buying again, suggesting confidence in a potential bull run later this year or in 2026. As Cathie Wood of ARK Invest noted: “We’re halfway through the current Bitcoin bull cycle — and there’s still another half to go.”
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The Growing Momentum Behind Ethereum and Solana ETFs
While Bitcoin ETFs have stabilized after a fierce fee war — with providers like BlackRock and Fidelity competing with rates as low as 0.24% — attention is now shifting to Ethereum spot ETFs.
Last week, several issuers revealed their proposed management fees for ETH ETFs, reigniting investor interest. Additionally, firms like VanEck and 21Shares have filed applications for Solana (SOL) spot ETFs, with rumors suggesting BlackRock may follow suit.
However, regulatory hurdles remain. In June 2023, the U.S. SEC classified MATIC, SOL, and ADA as securities — a designation that could block spot ETF approvals. Yet paradoxically, Ethereum itself allows staking (a feature typically associated with securities), yet its ETF is still moving forward.
This contradiction suggests evolving regulatory interpretations — and possible legal challenges ahead. If resolved favorably, we could see SOL ETF approval as early as 2026.
Political Winds Could Accelerate Crypto Adoption
The upcoming U.S. presidential election may play a pivotal role in shaping crypto policy. If Donald Trump returns to office, many analysts expect a pro-innovation stance toward digital assets, potentially accelerating regulatory clarity and adoption.
Frequently Asked Questions (FAQ)
Q: Has Germany finished selling all its Bitcoin?
A: Yes — as of mid-July 2025, the German government has fully liquidated its 50,000 BTC holdings from the Movie2k.to seizure.
Q: Why did Germany sell its Bitcoin instead of holding it?
A: Despite debate among lawmakers about treating BTC as a strategic reserve, the government opted to sell for immediate liquidity and risk mitigation.
Q: Could FTX repayments boost the crypto market?
A: Yes — up to half of FTX’s $8+ billion in cash repayments may flow back into crypto by late 2025, creating significant demand.
Q: Are we still in a Bitcoin accumulation phase?
A: Yes — over 547 days post-halving, historical patterns suggest we’re in the mid-cycle accumulation stage, ideal for long-term investors.
Q: Will Solana get a spot ETF?
A: Regulatory challenges exist due to its classification as a security, but filings by VanEck and 21Shares indicate growing institutional interest — approval may come in 2026.
Q: What does extreme fear in the Fear & Greed Index mean for investors?
A: It often signals oversold conditions and is historically a contrarian buy signal for Bitcoin.
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Final Thoughts
While large-scale sales from governments and bankrupt firms can create short-term pressure, they often clear the way for stronger rallies. With Germany’s exit complete, ETF inflows resuming, whales accumulating, and potential catalysts on the horizon — including ETH and SOL ETFs and political shifts — the foundation for a new bull phase appears to be forming.
For informed investors, periods of uncertainty are not times to retreat — but to position wisely.