US Government Holds $5B in Bitcoin

The United States government has firmly established itself as a significant player in the world of Bitcoin, holding over 200,000 BTC, with a staggering estimated value exceeding $5 billion. This revelation comes despite the government’s earlier sale of several thousand BTC, worth millions, earlier this year.

Data analysis conducted by crypto firm 21.co offers an insightful glimpse into the U.S. government’s crypto holdings. Their estimations suggest that the government currently possesses around 194,188 BTC, valued at approximately $5.3 billion. It’s important to note that these estimations are considered conservative, representing the lower bounds of the government’s holdings, relying on publicly available information.

This analysis delves into the movement of Bitcoin within U.S. government wallets associated with three significant seizures since 2020. These seizures include the Silk Road confiscation of 69,369 BTC in November 2020, the Bitfinex Hack seizure of 94,643 BTC in January 2022, and the James Zhong seizure of 51,326 BTC in March 2022.

Remarkably, the U.S. government has prudently safeguarded its Bitcoin holdings primarily in offline, encrypted storage devices, known as hardware wallets. These hardware wallets are securely stored under the watchful eyes of the Justice Department and the Internal Revenue Service. It’s important to clarify that seized assets don’t automatically become government property. The U.S. Marshals Service, the agency tasked with managing seized assets, gains possession of the confiscated Bitcoin only when a court issues a definitive forfeiture judgment.

Interestingly, the government has employed various methods to liquidate seized Bitcoin, including public auctions. One of the most memorable instances occurred in 2014 when billionaire Tim Draper acquired 30,000 BTC through U.S. government auctions. In recent years, though, the government has turned to cryptocurrency exchanges as a means of selling seized Bitcoin. A prime example of this approach unfolded in March this year when the government successfully sold 9,118 BTC on Coinbase, a sale confirmed through a public filing.

This significant presence of the U.S. government in the Bitcoin market underscores cryptocurrency adoption at a governmental level. As the government actively engages in Bitcoin-related activities, it not only showcases a growing acceptance of digital assets but also highlights the importance of transparency and adherence to legal procedures in the space.