The Bulgarian government has inadvertently become a part of the growing global community of Bitcoin billionaires. The southeastern European country of relatively modest GDP ($52.4 billion) has seized 213,519 bitcoins worth approximately $3.67 billion at current prices.
According to a May 19 press release by SELC (Southeast European Law Enforcement Center), following an investigation into an organized crime operation relating to customs fraud, 23 Bulgarian nationals were arrested with 5 of them being customs officials.
Bulgarian authorities seized the bitcoin wallets of the suspects which amounted to 213,519 bitcoins, valued at $500 million. As the price of Bitcoin rose by leaps and bounds over the past months, the value of the seized wallets rose with it.
The press release states that the offenders chose the “bitcoin way of investing/saving because it is rather difficult to be tracked and followed”.
It is interesting to note that this staggering amount corresponds to an estimated 22.25% or one-fifth of Bulgaria’s national debt, a windfall for such a small economy.
Perhaps the most compelling question now is what the Bulgarian government intends to do with their newfound fortune in cryptocurrency. On Nov 28, the Bulgarian government declined to release further details, citing an ongoing criminal investigation.
Tensions between Bulgarian banks and bitcoin exchanges have risen lately, after there was a blanket ban of Bulgarian bitcoin exchanges by major banks on Dec 7, prompting a forum post by a moderator on a Bulgarian bitcoin forum that read,
“The Banking Oligopoly in Bulgaria finally blocked payments to the…Exchange…We expected this to happen, but not so fast. It seems that the panic of the financial system is quite large.”
We’ve seen the total bitcoin trading volume increase rapidly over the past months, reaching a high of $4.5 billion last week. Mainly due to a frenzy of public interest in cryptocurrencies and the entrance of large institutional players in the form of hedge funds.
Nevertheless, the Bitcoin market unlike traditional financial instruments, still remains susceptible to price manipulation. If the Bulgarian authorities were to decide to dump their coins at once, they could effectively crash the price and potentially have significant ramifications on the Bitcoin price in the short-term.
It might also be true that either intentionally or perhaps more likely due to bureaucratic gridlock, the Bulgarian government could become a speculator on the price of Bitcoin, and continue to lower their national debt, assuming the price of Bitcoin keeps climbing higher.