German Government Bitcoin selling akin to UK selling its gold

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As a researcher with a background in financial history and a personal experience of observing market trends, I find the current situation of the German government selling its Bitcoin holdings at what seems to be the bottom of the market alarmingly reminiscent of Gordon Brown’s decision to sell gold during the 1999-2002 bear market.

As a researcher studying the current Bitcoin market trends, I’ve observed that the German government has been selling off its substantial Bitcoins holdings close to the market bottom. Concurrently, these coins have been purchased by buyers. This situation bears resemblance to the actions taken by the former UK Chancellor, Gordon Brown, who sold a massive portion of Britain’s gold reserves at the bottom of the gold market.

One potential way to rephrase this statement in clear and natural language is: Selling the entire bitcoin holdings of the German government at a market low could be viewed as one of the most regrettable financial moves by a sovereign nation since the UK sold over half of its gold reserves during the 1999-2002 bear market, which lasted for two decades.

Gordon Brown’s awful blunder

As a researcher looking back on Gordon Brown’s decision 25 years ago, it’s astonishing how often this topic comes up in discussions among financial analysts. The situation became even more volatile when Brown publicly announced the timing of his gold sales. Sadly, unscrupulous market manipulators and speculators were quick to exploit these disclosures, positioning themselves for maximum gain as the opportunities presented themselves.

Approximately 56% of the United Kingdom’s 715-tonne gold reserves were offloaded during that time frame at an average price of £275 ($354) per ounce. This sale generated roughly £3.5 billion for the country. However, gold prices experienced a significant surge in the subsequent years, reaching £1,000 an ounce in 2008 and £1,900 an ounce in 2011. The wisdom of selling such a substantial amount of gold at comparatively lower prices, along with the methods employed, will continue to be a topic of scrutiny in the annals of UK financial history.

Nearly 75% of German $BTC position already sold

To put it another way, the German government’s current actions are just as significant as the infamous episode you mentioned. Not too long ago, they held the fourth largest amount of Bitcoin among national governments, with a total of 50,000 Bitcoin. Only the United Kingdom (with 61,000 Bitcoin) and China (with 190,000 Bitcoin) held more. The US government topped the list with an impressive 213,246 Bitcoin.

As an analyst, I’d rephrase it as follows: With the recent sale of 2,375 Bitcoin, Germany has reduced its holdings to approximately a quarter of its initial stash, leaving around 13,117 Bitcoin remaining. If Berlin continues this selling trend at its current pace, all its Bitcoin could be offloaded within the next few days.

German financial blunder could be far worse than Brown’s

One explanation for the rapid sale of Bitcoin by the German government could be due to pressure from their banking sector, aiming to manipulate the price downward and initiate an early Bitcoin bear market. However, this strategy has not been successful thus far, as the demand for Bitcoin, particularly from institutional investors, remains robust and has kept the price above the significant threshold of $51,000.

If the German government eventually decides to dispose of its last Bitcoins, this action might be remembered as one of the most regrettable moves made by a sovereign state since the UK sold a large portion of its gold at the market’s lowest point.

As a crypto investor, I’ve noticed that gold has been losing value relative to Bitcoin since its inception. And now, the German government has made a questionable decision regarding their gold reserves. If history repeats itself, this decision could turn out to be much more costly than Gordon Brown’s infamous move back in the day. Only time will tell if the next decade bears witness to the consequences of this choice.

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2024-07-11 15:11