US Gov Becomes Top Holder of Bitcoin – Trustnodes
The US government has increased its bitcoin holdings to about 1% of the total supply according to blockchain analysis.
The US government currently holds 205,000 bitcoins, worth about $5.75 billion, more than at any time since 2013.
It follows three Blockbuster asset seizures since November 2020, starting with 70,000 seized from Individual X.
The officers involved provided the bitcoin addresses in the complaint and now we now know exactly what happens to those coins. They still have 69,369 BTC.
Then on November 9, 2021, they seized 51,000 bitcoins taken from James Zhong. Both seizures are related to the now defunct online bazaar Silk Road.
The Zhong seizure was the “second largest financial seizure ever” based on its value at the time of $3.36 billion according to the Justice Department.
A third success for law enforcement came from a slightly different area when they were able to take possession of 94,000 bitcoins from the Bitfinex hacker on January 31, 2022. They described it at the time, saying:
“31. On January 1, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file stored on LICHTENSTEIN’s cloud storage account, which was obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with their associated private keys.”
This detail was presumably revealed because some officials confused the “voluntary” handover of data from a cloud provider with the “hacking of private bitcoin keys” as some claimed at the time.
Regardless, this has added a lot to the government’s bitcoin holdings, although the Bitfinex ones may be more temporary holdings.
The Silk Roads are related to the Silk Road hacks, and it can be questioned if they have any connection with the hacked MT Gox coins, as the flow between the two was huge at the time.
These considerations may partly explain why they are still holding the coins, but it may also be because the authorities may be trying to hedge as with foresight, they suffered large losses in the 2014-15 sale of Silk Road bitcoins.
They seized 144,000 BTC at the time, and sold it for just $50 million. It is now worth, even with a price drop of about 70% since November 2021, $4 billion.
Additionally, the US government is a huge entity and needs private money outside of the banking or government system that does not reveal any information if you are careful how you spend it.
They are willing to pay informants in bitcoin and other cryptos for example. With a war going on in the fringes of Europe, they can also finance with bitcoin some new secret arms production facilities.
The government of course has the power to tell a bank to shut up if they want to regarding this type of activity, but the bank data could be hacked or an employee could leak it. Bitcoin instead, and the data, has full control over the specialist agents.
However, the government being so comprehensive can also mean that the left hand does not talk to the right hand. One might sell it for $50 million, and the other might have to buy it for $4 billion.
But this is only the bitcoin holdings of the US government that we know of, not necessarily their total holdings, and they are the largest of any government.