Joana Cotar, an independent member of the Bundestag, one of Germany’s legislative chambers, has called on the government to stop the ongoing Bitcoin (BTC) sell-off, which has had a notable impact on the BTC market, resulting in a 10% drop in the cryptocurrency’s price over the past two weeks.
Bitcoin As Valuable Asset Class For State Treasury
In a letter addressed to the government, Cotar emphasized that BTC has gained recognition as a genuine asset class and a promising investment for the future due to its remarkable price surge.
The lawmaker highlighted that traditional financial institutions now view Bitcoin as a real asset with properties similar to “digital gold,” making it suitable for the state treasury.
Cotar pointed out that governments worldwide are reevaluating Bitcoin to foster innovation within the ecosystem or enforce stricter regulations on Bitcoin ownership and transactions. However, she acknowledged that understanding the benefits of Bitcoin can be challenging for individuals, and the same applies to governments and politicians.
Cotar underscored that a well-designed Bitcoin strategy has the potential to reshape a country’s development, foster economic prosperity, and safeguard fundamental human freedoms for all citizens. As BTC continues to gain acceptance globally, she believes more nations will consider integrating it into their financial and economic systems.
Interestingly, Cotar outlined several advantages for the German government in retaining its Bitcoin holdings instead of selling them.
BTC Strategy For Germany
Firstly, including Bitcoin in the treasury alongside traditional fiat currencies and gold reserves diversifies a nation’s assets, reducing risks associated with overexposure to a single asset class.
Second, the lawmaker highlighted Bitcoin’s scarcity and deflationary nature, which makes it an attractive alternative for wealth preservation. By holding Bitcoin as part of the national treasury, Cotar believes that the government can protect national reserves from inflation and currency devaluation beyond its control.
Furthermore, Cotar highlighted that including Bitcoin in the treasury can enhance overall portfolio performance, as various studies have shown that Bitcoin’s risk-adjusted returns surpass those of traditional investments like stocks and bonds over the long term.
Cotar, who has long been a proponent of making Bitcoin legal tender in Germany through appropriate legislation, further argued that developing a favorable regulatory framework for all Bitcoin-related activities can open doors for new businesses and technological progress while paving the way for further economic development in the country.
Cotar concluded by emphasizing that a Bitcoin-friendly legal framework will promote research and development in the financial and technology sectors, attract top talent, and foster collaboration between private companies, government institutions, and the scientific community.
Sell-Off Continues, Putting Pressure On BTC Price
It is worth noting that the German government sold another batch of confiscated BTC worth over $175 million on Thursday. According to data from market intelligence platform Arkham, the German authorities still hold 40,359 BTC worth approximately $2.3 billion.
This, along with the US government selling off its Bitcoin holdings, caused BTC to fall as low as $56,700 on Thursday. However, the largest cryptocurrency in the market, which has seen a 17% price drop in the monthly time frame, has recovered to its current price level of $58,300.
Featured image from DALL-E, chart from TradingView.com