Bitcoin and the German Election: What’s at Stake?

The European authorities are not very favorable to bitcoin, to say the least, but the German election could change the game.

The Germans punish Olaf Scholz

The result of the German election was highly anticipated given the economic difficulties caused by the decision to forgo Russian gas.

Initially scheduled for September 28, 2025, the election was brought forward due to the collapse of the government coalition led by the Greens, the SPD socialists, and the liberals of the small FDP party.

This time, it was the traditional center-right alliance CDU/CSU that prevailed, trailed by the Alternative für Deutschland (AfD) party, equivalent to the National Rally in France.

Whereas the outgoing chancellor Olaf Scholz’s SPD party won 206 seats in 2021, it now holds only 120. Conversely, the AfD goes from 83 to 152 seats. CDU/CSU takes the lead with 208 seats.

In the German federal electoral system, a single party or parliamentary group rarely wins an absolute majority in the Bundestag. The CDU/CSU only secured 28.5% of the seats, meaning Germany will once again have to negotiate a coalition government.

Given the results, the exercise will be difficult due to the “Brandmauer”: the promise of traditional parties not to form a coalition with the AfD. Thus, we should expect many weeks, if not months, of political bargaining.

A pro-bitcoin coalition?

Bitcoin was one of the sticking points for Olaf Scholz’s coalition. The president of the Liberal FDP party Christian Lindner harshly criticized the chancellor for having sold more than 50,000 bitcoins at an average price of 57,600 dollars last summer.

The FDP advocates a policy similar to that of the United States. Unfortunately, with less than 5%, the FDP will be absent from the next Bundestag. In contrast, with nearly 21% of the seats, the AfD could have a say, which is potentially good news for bitcoin.

The AfD supports non-draconian regulation, the elimination of capital gains tax, and opposes CBDCs. Knowing that German legislation is already much more favorable than in France since holding bitcoins for more than a year avoids the tax.

Given Elon Musk‘s open support for the AfD, it is likely that his position regarding bitcoin will mirror that of the United States. Knowing that Washington has some very good surprises in store on that front.

There are rumors that Donald Trump’s government will create a national reserve of bitcoins while abolishing capital gains tax. And this is after already allowing banks to hold bitcoins on behalf of their clients.

Another telling sign is that most members of the Trump government own bitcoins. What do they know that we don’t…

Who will be the next chancellor?

Friedrich Merz, a former business lawyer and multimillionaire banker. His time at BlackRock is encouraging since the giant investment fund is extremely favorable to bitcoin. His membership on the Board of Trustees of the World Economic Forum is less thrilling.

It will all depend on the colors of the coalition government. Mr. Merz notably sparked controversy two weeks ago after relying on the AfD to pass immigration restrictions. Hundreds of thousands of people took to the streets to protest.

And although he has promised not to form a coalition with the AfD, less than half of German voters believe it according to The Economist. Indeed, allying with the SPD already seems out of the question.

The second option would be to form a large coalition which could prove fragile. Mr. Merz hopes to conclude negotiations by Easter (April 20). The third option would be to enter into an alliance with the AfD.

After all, Mr. Merz stated that he could envision working closely with Giorgia Meloni who is well to the right of the political spectrum. Not to mention that the United States will exert pressure in favor of the AfD.

As things unfold, all eyes turn to Washington and its strategic reserve of bitcoins. How could Europe remain idle if the Americans embrace bitcoin?

On the French side, things remain at a standstill, to put it politely. Our article on the subject: Bitcoin: France ridicules itself a little more