New FOIA documents show that the US government currently owns 28,988 bitcoins, which is only 15% of the assumed total. This revelation immediately caused fears of a massive sell-off under President Biden.
Technically, federal agencies still hold 200,000 BTC, but these assets aren’t government property. For example, up to 48% of this stockpile could be returned to Bitfinex creditors alone. This will undoubtedly impact Trump’s Reserve plans.
How Much Bitcoin Does the US Own?
At this point, it’s well known that years of asset seizures have made the US government one of the largest Bitcoin holders.
However, a new report shows that this story may not be so simple. Today, the US Marshals Service confirmed that it only holds 28,988 BTC, only 15% of the purported total. Instead of $24 billion, this stash is only worth $3.47 billion.
Naturally, this revelation caused a huge freakout in the crypto community. Last year was a bad year for government Bitcoin liquidation worldwide, and President Biden sold much of the US’ reserves.
Immediately, figures like Senator Cynthia Lummis openly questioned if a major sale had happened in secret.
To be clear, the disaster scenario does not seem particularly likely. Arkham Intelligence, an on-chain analysis firm, keeps records on the US government’s Bitcoin holdings.
Intraledger transactions may or may not cause the 200,000 figure to be a slight overestimation, but we would know if Biden sold off all 85% of the government’s BTC.
Seized vs Forfeited Assets: A Key Distinction
Nonetheless, this discrepancy is still extremely important. As the report’s author pointed out, the US Marshals hold all the government’s forfeited Bitcoin.
Over the years, plenty of major crypto criminals have forfeited billions in BTC, officially making these assets government property. This is the aforementioned $3.4 billion, and Uncle Sam can do whatever he wants with it.
However, plenty of criminals do not forfeit their Bitcoin to the US government. These are seized assets, not government property. The President doesn’t necessarily have the authority to do anything with these tokens while they exist in this limbo.
For example, law enforcement holds several billion BTC from the Bitfinex hack, totaling around 94,000 BTC. Depending on a few things, most or all of these assets might get returned to the exchange’s creditors.
If that happens, that’s almost half of the government’s “stockpile” right there.
Overall, Trump’s Strategic Bitcoin Reserve is not going to work as advertised. The FBI, DEA, and other government agencies currently custody a lot of Bitcoin, but the US doesn’t necessarily own it.
Generally, observers can expect that the Reserve will hold more than $3.4 billion. However, the purported total of $24 billion was only ever a fantasy.
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