Introduction
The United States government has become one of the largest holders of Bitcoin, with over 200,000 BTC worth more than $5 billion, according to data analysis by crypto firm 21.co.
The Numbers
Based on public filings, 21.co estimated that the U.S. government still holds 194,188 BTC, which is valued at $5.3 billion. It should be noted that these estimations are the lower bounds based on publicly available information.
Tracking the Bitcoin Movement
The analysis focused on the Bitcoin movement of government wallets associated with the three largest BTC seizures since 2020. These seizures include 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.
Storage and Seizures
The government's Bitcoin stash is primarily kept offline in encrypted storage devices known as hardware wallets. These wallets are stored under the Justice Department and the Internal Revenue Service. The U.S. government has made two significant seizures in 2022.
Asset Forfeiture Process
Seized assets do not immediately belong to the government. The U.S. Marshals Service, the agency responsible for selling seized property, only takes possession of the seized Bitcoins after a court issues a definitive forfeiture judgment.
Government Auctions
The U.S. government has historically sold a portion of the seized Bitcoin through public auctions. In 2014, billionaire Tim Draper famously purchased 30,000 BTC from government auctions. However, in recent years, the government has started selling seized Bitcoins through crypto exchanges instead of public auctions. One such sale occurred in March of this year when 9,118 BTC was sold on Coinbase.
Conclusion
The U.S. government's substantial holdings of Bitcoin highlight its involvement and interest in the cryptocurrency market. As Bitcoin continues to gain popularity and value, it will be interesting to see how governments around the world navigate this new digital landscape.
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