Why is the US government holding Bitcoin?
Reports indicate that the U.S. government currently holds over 205,000 bitcoin, making it a larger bitcoin holder than companies like MicroStrategy and Tesla combined. This amounts to over 1% of the total circulating supply of Bitcoin, with an approximate value of $5.7 billion at current market prices.
MicroStrategy, which is known for its significant bitcoin holdings, holds 132,500 BTC, while Tesla holds 10,752 BTC. Despite being giant Bitcoin holders, these companies are surpassed by the U.S. government in terms of the amount of Bitcoin they hold.
The U.S. government has acquired this bitcoin through various asset seizures over the years. In March 2023, they sent 9,860 BTC to Coinbase, but they still remain the largest known Bitcoin holder.
The first seizure occurred when the U.S. government confiscated 69,396 BTC from an individual known as “Individual X.” Blockchain analysis suggests that this individual’s address, “1HQ3,” could be linked to Silk Road marketplace activities.
The second instance of seizure involved a total of 94,636 BTC, which was connected to the Bitfinex hack incident in 2016. During the investigation, Ilya Lichtenstein and his wife were arrested and charged with laundering 119,754 BTC in over 2,000 transactions spanning five years. This event is referred to as the “largest cryptocurrency seizure to date” by the U.S. government.
Another case that resulted in the seizure of over 50,000 bitcoin was also related to the Silk Road and involved an individual named James Zhong, who pleaded guilty to unlawfully obtaining that amount. The seizure took place in November 2021 when the Department of Justice raided Zhong’s residence in Georgia, resulting in the seizure of over 51,326 BTC.
This accumulation of Bitcoin by the U.S. government highlights two interesting points.
Firstly, it indicates that the U.S. government views Bitcoin as a form of currency and is actively fighting against what it considers to be unlawful activities within its jurisdiction.
Secondly, the fact that the U.S. government has not liquidated its confiscated bitcoin stash despite the opportunity to do so raises the question of whether the U.S. government may be acting as a bitcoin speculator.
The above scenarios indicate the government trying to medal its way into the DEFI world. It’s time you explored its potential too. We at PeerBlue Finance aim to decode the DEFI world and make it accessible to all!
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