The U.S. government has emerged as one of the world’s largest holders of Bitcoin, with an estimated 200,000 Bitcoins, valued at over $5 billion. This substantial holding is primarily the result of three recent seizures from cybercriminals and darknet markets.
These Bitcoins are mostly stored in hardware wallets controlled by various agencies, including the Ministry of Finance and the Internal Revenue Service (IRS). The U.S. government’s approach to cryptocurrency has been complex, making the notion that it owns such a large quantity of Bitcoin surprising.
Holdings are from seizures
The majority of these holdings come from seizures, some of which have been publicized by authorities. For instance, in February 2022, the Department of Justice announced it had seized 94,636 Bitcoin from a hack of the Bitfinex cryptocurrency exchange.
Despite skepticism among politicians and certain sections of the public, Bitcoin’s revival suggests there is continued value in the digital asset. However, the U.S. government’s stance on Bitcoin is not driven by market trends or potential profits.
Jarod Koopman, executive director of the IRS’s cyber and forensics services section, stated,
“We don’t play the market. We basically are set by the timing in our process”.
$5 billion worth of assets
The size of the government’s total stash is likely much larger than the estimated 200,000 Bitcoins. The U.S. government’s holdings are still worth more than $5 billion, even after selling some 20,000 Bitcoin.
In conclusion, the U.S. government’s substantial Bitcoin holdings highlight its active role in regulating and monitoring cryptocurrency markets. These holdings are primarily a byproduct of law enforcement activities rather than strategic investment decisions. As such, they offer a unique perspective on the intersection of government regulation and digital currencies.