SUMMARY
- The German government sold 50,000 bitcoin just four months ago, missing out on $1.6 billion as the asset’s price surged.
- This loss is significantly smaller compared to the missed value from the U.S. government’s 11 bitcoin auctions.
The German government lost up to $1.6 billion by selling 50,000 bitcoin in July for $2.88 billion, just before the asset experienced a sensational rally fueled by Donald Trump’s U.S. presidential triumph. At an average price of $57,600 per bitcoin, the deal seemed like a prudent move at the time. Be that as it may, the price of bitcoin soon skyrocketed, outperforming its all-time high and reaching new records. By November 11, bitcoin surged nearly $10,000 in a single day, stamping its largest-ever single-day gain. Had the German government held onto its bitcoin, the resources would presently be worth roughly $4.5 billion, reflecting a 56% increment in value.
The U.S. government has faced comparable missed opportunities by selling off seized bitcoin in 11 auctions over the past decade. Concurring to the U.S. government deals tracker maintained by Case CSO Jameson Lopp, the U.S. has auctioned 195,091 bitcoin, netting $366.5 million in total. However, at current prices, that bitcoin would be worth about $17 billion, resulting in an opportunity cost of $16.6 billion.
In contrast, Donald Trump, upon his potential return to the presidency, might take a diverse approach. In July, Trump demonstrated he would stop the sale of seized bitcoin, instead holding onto it as part of a “strategic national bitcoin stockpile.” This would preserve the value of the government’s bitcoin property, allowing them to appreciate over time.
Alongside Trump’s position, Wyoming Republican Sen. Cynthia Lummis has proposed a draft bill empowering the U.S. government to procure 1 million bitcoin, right now valued at $88 billion. This activity, aimed at securing the U.S. dollar with a digital hard resource, may offset a few of the losses from past deals. In any case, with the market price presently significantly higher, procuring such a huge sum of bitcoin would be much more expensive than it would have been in the past.
The U.S. and German governments’ missed opportunities highlight the potential long-term value of bitcoin and emphasize the financial results of offloading it prematurely.