Transparency and privacy in Bitcoin transactions: too many or not enough? – the case of Germany

Loïc Sauce

Chapter 12 in Research Handbook on FinTech, 2026, pp 216-233 from Edward Elgar Publishing

Abstract: Bitcoin's privacy model relies on the unlinkability of a public address and the real identity of its owner. The former is freely auditable public information, while the latter is private information. Deanonymization happens when a public address can be linked to an entity with a high level of probability. The chapter analyzes the impact of transactions performed by deanonymized entities on the Bitcoin market. We study the case of transactions performed by wallets associated with the German government that unexpectedly sold its holding of 50,000 BTC in a series of transactions between June and July 2024. We argue that the observed volatility was not caused by the size of the sell-offs but by the identity of the seller. We draw further insights into the impact of government-owned wallets on crypto-market dynamics. The chapter contributes to the literature on the volatility of crypto-markets by considering privacy and transparency of transactions as drivers of volatility.

Keywords: Bitcoin; Blockchain; Privacy; Market volatility; State-owned Bitcoin; Germany (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035321414
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