US Government's Reported Bitcoin Holdings: Is $5B Figure Just The Tip Of The Iceberg?

According to a new analysis, the U.S. government's reported Bitcoin BTC/USD holdings stand at $5 billion, but this figure only accounts for three documented seizures. 

What Happened: The U.S. government currently holds 194,188 BTC, equivalent to $5.3 billion, making it one of the largest Bitcoin holders, based on crypto firm 21.co data, as reported by Cointelegraph. The firm notes that this is the “lower-bound estimations of the U.S. government holdings based on publicly available information.”

Find out more on government holdings of crypto and its effects on the crypto market. Meet and engage with other transformative Digital Asset and Crypto business leaders and investors at Benzinga's exclusive event: Future of Digital Assets. Tickets are flying: Get yours!  

Read Next: California Governor Newsom Signs Crypto Bill: Progressive Digital Asset Regulation

Since 2020, the government has reported three large BTC seizures, including the Silk Road seizure 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. The $5 billion holdings consist of the three seizures mentioned.

The BTC is kept primarily offline in hardware wallets, which are encrypted storage devices, held by the U.S. Department of Justice and the Internal Revenue Service. The government does not get immediate control of the seized assets. The U.S. Marshals Service, the primary agency for liquidating seized assets, gets the ownership after a court issues a final forfeiture order and transfers the tokens.

Why It Matters: Any sale by the U.S. government could potentially lead to a swing in crypto prices and impact the crypto and digital assets market. As reported by The Wall Street Journal, Jarod Koopman, executive director of the IRS’s cyber and forensics services section said, “We don’t play the market. We basically are set by the timing in our process.”

The government is not involved in any HODLing (holding onto assets without the selling intention) nor is it waiting for the token value to rise before selling.

While the U.S. government previously would sell a partial portion of the seized Bitcoin through an auction system based on court liquidation orders, it now looks to crypto exchanges to offload any seized tokens. In March 2023, a public filing indicated the offloading of 9,118 BTC on Coinbase by the government.

Benzinga's Future of Digital Assets conference is scheduled for Nov. 14. Attend and learn more about the government strategies to sell seized BTC. The gathering is seen as pivotal for the digital assets community. The event will spotlight the latest trends, innovations, and challenges in the digital asset realm.

Also Read: Crypto Analyst Foresees Historic Crypto Bull Run Driven By AI And Money Printing

Photo: Shutterstock