U.S. government is a ‘Bitcoin whale’ with holdings of nearly 200k BTC

The U.S. government is now one of the largest Bitcoin (BTC) holders in the world, with on-chain data showing that they hold nearly 200,000 BTC, worth more than $5 billion at the time of writing, despite selling several thousand BTC earlier in the year. According to analysis provided by the crypto firm 21.co, the parent company of exchange-traded product provider 21Shares, the U.S. Government has seized at least 215k BTC since 2020, which clearly established them as “one of the largest BTC whales.” Notable seizures include the November 2020 Silk Road seizure of 69,369 BTC, the January 2022 Bitfinex hack seizure of 94,643 BTC, and the March 2022 James Zhong seizure of 51,326 BTC. Data provided by Glassnode shows that on March 9, 2023, addresses associated with U.S. government law enforcement seizures transferred 9,861 BTC to a Coinbase address. Blockchain security company PeckShield confirmed that the government sold 9,826 Bitcoin worth $217 million on Coinbase in March. Following that sale, on-chain data shows that the government still holds approximately 194,188 BTC – nearly 1% of the circulating supply – estimated to be worth $5.5 billion at the time of writing, with Bitcoin trading near $28,350.

U.S. government Bitcoin holdings. Source: Dune Analytics 21.co noted that “this is a lower-bound estimation of the US government holdings based on publicly available information.” The government previously disclosed that the majority of its Bitcoin holdings are held offline in encrypted storage devices that are maintained by the Justice Department and the Internal Revenue Service. Under U.S. law, seized assets do not automatically become government property. The courts must first issue a definitive forfeiture judgment, at which point the U.S. Marshals Service, which is the principal agency in charge of selling seized property, can receive possession of the seized assets. Aside from the sale on March 9, the government has conducted several seized BTC sales through an auction system based on court liquidation orders. That is how billionaire Tim Draper, a well-known cryptocurrency advocate, was able to purchase 29,656 BTC in 2014 when Bitcoin traded at a price of $640. The government has elected to conduct its more recent sales on crypto exchanges rather than via public auction.