US Government's Bitcoin Holdings Spark Speculation

By: Eva Baxter

Recent revelations concerning the US government's Bitcoin reserves have generated a significant buzz in the crypto community. According to a Freedom of Information Act (FOIA) request, the US Marshals Service currently holds approximately 28,988 Bitcoin, valued at about $3.4 billion. This figure is far below the previously speculated 200,000 BTC, which some believed the government had in its possession. The emerging discrepancy from prior estimates by blockchain analytics platforms like Arkham Intelligence and Bitcoin Treasuries has triggered speculation that the US may have been quietly offloading its Bitcoin assets.

Bitcoin Magazine's CEO, David Bailey, hinted at the possibility of the US government having sold a significant portion of its Bitcoin holdings even before the inauguration of President Donald Trump. He raised suspicions that the US could be reducing its Bitcoin reserves without leaving any conspicuous on-chain evidence, possibly through custodial involvement with platforms like Coinbase for off-chain transactions. This raises questions about the transparency of government dealings with its digital assets.

Moreover, the seeming divestiture coincides with President Trump's prior announcement, which included plans for the seized Bitcoin to become part of a national strategic reserve, indicating a strategic long-term approach. However, the current unexpectedly low Bitcoin holdings have prompted reactions from public figures like US Senator Cynthia Lummis, who expressed concerns about such a strategic maneuver potentially setting the country back in the global Bitcoin race.

Additional insights suggest that the misunderstanding might have emerged by conflating the US Marshals Service holdings with the overall federal government stocks. Arkham Intelligence data reports the US government as a whole still retains roughly 198,000 BTC, thus explaining the gap between actual government holdings and the Marshals' holdings. This disparity points to ongoing complexities in how different federal agencies handle seized and forfeited assets, with many still involved in investigations or held by other agencies, limiting current control or ownership by the government. Whether or not the US has parted with a substantial portion of its Bitcoin, the ambiguity highlights the necessity for clarity and accountability in government dealings with digital currencies.