- The US government is among the biggest Bitcoin holders.
- The Bitcoin acquired by the US government comes from criminal seizures.
- Legal red tape prevents the US government from quickly liquidating coins.
In cryptocurrency, Bitcoin whales are entities holding over 1,000 BTC in a single wallet address. These mega-holders can place massive buy and sell orders to potentially manipulate markets for their own benefit.
Among the largest whales is the US government, with an estimated 200,000 BTC balance, valued at approximately $5.6 billion based on the current price. This enormous stash makes the US government a bigger whale than software company MicroStrategy.
Uncle Sam Doesn’t Care About Price
The US government acquired its vast 200,000 Bitcoin stash through criminal confiscations over time, including the recent seizure of 94,643 BTC related to the Bitfinex hack in which 120,000 BTC were stolen in 2016.
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The US government’s Bitcoin balance is substantial enough to impact markets, leading to an interest in how it treats its stash of seized coins. While the ultimate end goal is to convert its holdings into dollars, the US government is hindered by the legal processes involved with criminal investigations, which can often take years to complete.
Additionally, the US government must gain court-approved confiscation orders before seized Bitcoin transfers into its ownership, adding to the time coins are held in limbo, according to the Wall Street Journal (WSJ). All of this means the liquidation process is a lengthy and drawn-out affair, making day-to-day price fluctuations of little importance to the US government.
“Only after a court issues a final forfeiture order does the government take ownership and transfer the tokens to the U.S.,” explained the WSJ.
Despite being hamstrung by red tape, the vast amount of coins held by the US government places it high on the list of top Bitcoin holders.
Who Has the Most Bitcoin?
While the US government is among the top Bitcoin holders, with an estimated 200,000 BTC balance, research conducted by Arkham Intelligence noted that Satoshi Nakamoto was the biggest BTC holder with a balance of 1.1 million Bitcoin.
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Crypto exchanges Binance and Bitfinex hold 600,000 and 200,000 BTC, respectively, to exceed or match the US government’s holdings. However, the US government holds more BTC than Gemini co-founders Tyler and Cameron Winklevoss, investor Tim Draper, and MicroStrategy chair Michael Saylor combined, at estimated individual BTC balances of 70,000, 29,656, and 17,732, respectively.
Likewise, compared to public companies, the US government’s BTC balance exceeds that of MicroStrategy, Marathon Digital Holdings, and Tesla combined, which held a BTC balance of 140,000, 11,466, and 10,700, respectively, in June.
MicroStrategy has made three more purchases since Arkham Intelligence published its research, giving the company a current total holding of 158,245 BTC.
On the Flipside
- The Bitcoin balance held by exchanges includes user balances, which obscures the actual coins the exchanges own.
- Users can hold balances on multiple accounts, potentially understating the number of true whales.
- While the US government is not concerned about day-to-day price fluctuations, it still has a proxy interest in fostering positive price appreciation.
Why This Matters
Ironically, US authorities have waged a regulatory campaign against cryptocurrency, yet the US government is one of the biggest Bitcoin whales. This highlights the fragmentation between different agencies and departments and underscores the divisiveness of digital assets at the political level.
Learn more about Bitcoin whales flipping into accumulation mode here:
Bitcoin Whale Wallets Pass 2019 All-Time High
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