The latest data shows that the United States government is one of the largest Bitcoin holders. Estimates by 21.co suggest that the U.S. government currently holds approximately 194,188 BTC, which translates to a staggering value of $5.3 billion.
The United States government holds the Bitcoin through multiple channels, including:
- Seizures: The US government has seized a significant amount of Bitcoin from criminals and other bad actors.
- Forfeitures: The US government has also forfeited Bitcoin that was used in crimes or that was otherwise obtained illegally.
- Investments: The US government has also invested directly in Bitcoin through various agencies, such as the Department of Defense and the General Services Administration.
However, the recent holding data is based upon the Bitcoins that the US government had seized. As per the data, three big seizures contribute to the major part of the US government’s Bitcoin holdings. The seizures include:
- Silk Road Seizure (November 2020): In one of the most significant seizures, the U.S. government confiscated a total of 69,369 BTC in November 2020.
- Bitfinex Hack Seizure (January 2022): A major turning point occurred when the U.S. government seized 94,643 BTC in January 2022, following the infamous Bitfinex hack. This event highlighted the government’s ability to recover assets lost due to cyberattacks.
- James Zhong Seizure (March 2022): The most recent of the major seizures, the James Zhong case saw the U.S. government taking possession of 51,326 BTC in March 2022. This incident underscored the government’s continued vigilance in ensuring compliance and enforcement in the cryptocurrency sphere.
What Does it Mean for Cryptocurrency?
The US Government’s stance toward Bitcoin and other cryptocurrencies hasn’t been particularly favorable in recent times. Regulatory bodies, such as the US SEC, have intensified their scrutiny of cryptocurrencies, filing numerous cases against crypto companies and exchanges
The US government’s accumulation of Bitcoin is not a sign of its endorsement of the cryptocurrency. Instead, these holdings are primarily the result of Bitcoin seizures conducted by the government. It’s important to note that the government’s Bitcoin holdings primarily serve as offline custody and don’t represent ownership. The government gains possession of seized Bitcoin through a court-issued forfeiture judgment.
Furthermore, historical data reveals that upon acquiring ownership of Bitcoin holdings, the US government has often chosen to sell or auction the assets. Back in 2014, billionaire Tim Draper purchased 30,000 BTC in a US government auction. Notably, in March 2023, the US government initiated the sale of 9,118 BTC on the Coinbase platform. These instances highlight the government’s practice of divesting itself of Bitcoin holdings through public auctions and sales.
Hence, the US government’s possession of Bitcoin doesn’t signify an endorsement of the cryptocurrency. Instead, it may have an adverse effect, as government-owned Bitcoin is often sold to exchanges, contributing to increased market liquidation.
Conclusion
In conclusion, the U.S. government’s status as one of the largest Bitcoin holders does not signify a significant milestone in the adoption and recognition of cryptocurrencies. It usually means that in the future, the government will most probably sell it back to the exchange after it gets the ownership of the holdings.
Currently, Bitcoin is trading within a narrow range of $27,500 and $28,500. The overall outlook is neutral.
