Key Points
- The U.S. federal government has sold around 195,000 Bitcoin, generating approximately $366 million from criminal seizures.
- American taxpayers have potentially lost up to $17 billion in Bitcoin profits since 2013 due to the government’s investment strategy.
The U.S. government has been selling Bitcoin obtained through criminal seizures for the past decade. Over this period, it has sold nearly 195,000 Bitcoin, yielding an estimated $366 million. This includes Bitcoin linked to the infamous Silk Road.
Missed Profits and Crypto Reserves
David Sacks, the White House AI and Crypto Czar, expressed that American taxpayers might have lost out on approximately $17 billion in Bitcoin profits since 2013. This loss is attributed to the investment strategy of previous administrations. Sacks shared an analysis of the Federal Government’s Bitcoin sales, hinting at the possibility of a U.S. crypto reserve under President Donald Trump’s administration.
The U.S. government started seizing Bitcoin in 2013, when the FBI confiscated 11 Bitcoin from a criminal attempting to purchase illegal drugs. This marked the first instance of an American agency taking control of the asset. Since then, law enforcement agencies have seized about 195,000 Bitcoin. Records show that the government has sold Bitcoin 11 times in the past 12 years, liquidating 173,000 Bitcoin by November 2015.
Future of Bitcoin in U.S. Government
As of March 6, the Bitcoin sold by the government would be worth over $15 billion, given the price of $89,800 per Bitcoin. If the government had retained the Bitcoin, it could be worth over $17 billion today, according to Sacks. This implies that the government may have missed out on significant crypto wealth by selling the asset prematurely.
Currently, the government holds 207,000 Bitcoin, which could potentially become a national stockpile or the basis for a U.S. crypto reserve. President Trump’s executive order in January instructed his crypto cabinet and regulators like the Securities and Exchange Commission to develop legislation for a Bitcoin reserve. This move has raised hopes in the crypto industry.
Trump’s comments about combining Bitcoin with altcoins in a reserve have caused a divide among his supporters in the crypto and tech industries. Nevertheless, it is anticipated that Trump will announce a Bitcoin reserve strategy at the first White Crypto Summit on March 7. The price of Bitcoin reached $90,000 ahead of the event, influenced by market volatility.
