The German government is flooding the crypto market with Bitcoin. As of Wednesday, it has transferred at least $615 million of Bitcoin to various crypto exchanges and market entities, according to data by Arkham Intelligence.

The government has sold off the almost 50,000 of Bitcoin it seized in mid-January, worth about $2.1 billion at the time, by police in the eastern German state of Saxony. The annexation was the result of a “voluntary transfer” from the suspects, accused of operating Movie2k.to, a film piracy website that was active in 2013.

On-chain data shows Bitcoin flowing in and out of the German Government (BKA) wallet from late January onward. There remains 13,111 Bitcoin in the wallet, worth around $759 million at the time of publication. This means about 75% of the seized assets have been sold off so far.

The prospect of $2.1 billion of Bitcoin entering the market may have spooked some investors as Germany's sales have coincided with recent price corrections. Bitcoin's latest decline began on June 6, according to CoinGecko data, aligning with when the BKA outflows began to accelerate. Bitcoin has dropped around 19% since then, and is now trading around $57,000.

There are indeed “market fears” about Germany's sell off its inventory of Bitcoin, admits OKX Chief Commercial Officer Lennix Lai. Adding to the sell pressure has been Mt. Gox last week commencing Bitcoin repayments worth $9 billion to creditors, the U.S. government selling seized Silk Road and Banmeet Singh coins.

"All of this is not only applying legitimate sell pressure into the market, but also telegraphed selling to the market—giving market participants the opportunity to sell in anticipation of these events occurring," Zach Bruch, founder and CEO of crypo casino MyPrize, told Fortune. In other words, anticipation of the sales, only intensified the impact of them.

The bigger picture

But taking a step back, 50,000 Bitcoin represents just 0.25% of the total supply of the approximately 19,700,000 that have been mined so far. “While such sell-offs may result in short-term volatility, the Bitcoin market tends to have adequate liquidity to absorb them and rebound fairly quickly. It's unlikely that these sell-offs will trigger a landslide drop in Bitcoin price," Lai told Fortune.

Fortunately, despite Bitcoin’s downturn in recent weeks, the spot ETFs have received fresh capital, after weeks of outflows. Investors in these funds that may be slowing the drop in price. Since June 25, the funds have seen net inflows of $886.8 million, according to CoinGlass data.

Despite central banks holding large reserves of foreign currencies—the U.S. holds at least $35 billion worth of euros and yen—the German government has opted for a mass sell-off policy. This decision has raised criticism from the crypto community, not merely due to the impact on supply and demand, but for the logic, assuming that the government is selling Bitcoin in exchange for euros. While Bitcoin's value has increased by over 20,754% since 2015, the euro's purchasing power declined by 39% between 2000 and 2020. "Make it make sense," one X user wrote.

This story was originally featured on Fortune.com