Crypto Daily - The German government is continuing to sell its large Bitcoin position near the market bottom, while it is continuing to be absorbed by buyers. Is this a similar play to when UK chancellor Gordon Brown sold a huge chunk of his country’s gold at the bottom of the market?
The current selling of what could be the entire $BTC holdings of the German government at the bottom of the market could be held up in years to come as one of the worst financial decisions by a sovereign country since the UK started to sell more than half of its gold reserves at the bottom of a 20 year bear market between 1999 to 2002.
Gordon Brown’s awful blunder
Gordon Brown’s decision 25 years ago is still talked over incredulously by analysts since that time. What made matters worse is that Brown told the market exactly when he would begin to sell the gold, and the manipulators and speculators just positioned themselves and made the absolute most of the opportunities when they came.401 tonnes of the 715 tonnes UK holdings were sold in this period for an average price of £275 ($354) an ounce, which netted the country around £3.5 billion. However, in the following years the price of gold erupted skywards, increasing to £1,000 an ounce in 2008, and £1,900 an ounce in 2011. The stupidity of Brown’s decision to sell the gold, and how it was carried out, are likely to remain foremost in the annals of UK financial history.
Nearly 75% of German $BTC position already sold
That said, what the German government is currently doing could more than match this sorry episode. Not very long ago, the German government was 4th in the list of $BTC holdings for national governments. Their position of 50,000 $BTC was only surpassed by the UK (61,000 $BTC) in 3rd position, China with 190,000 $BTC in 2nd position, and the United States in 1st place with 213,246 $BTC.Before today’s latest movement to exchanges of 2,375 $BTC, the German government’s position was down to just over a quarter of its original holdings, with 13,117 $BTC remaining. If the Germans keep up with their large-scale selling, the entire amount could be sold off in the next several days.
German financial blunder could be far worse than Brown’s
One of the reasons for the German government to sell all of its $BTC in such a short period of time could be pressure from its own banking system, with the idea to try and force the price down and send Bitcoin into an early bear market. This has not worked so far, and what seems to be insatiable demand for $BTC, probably from institutional investors, has kept the price above the absolutely critical level of $51,000.Therefore, if the German government does finally sell off its remaining Bitcoin, this could go down in history as one of the very worst decisions by a sovereign State since the UK sold more than half of its gold at the bottom of the market.
Given that gold has been plummeting in value against Bitcoin since its inception, the German government’s current decision could turn out to be several orders of magnitude worse than Gordon Brown’s sorry decision all those years ago. The next 10 years could be the judge of this.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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