Governments Hold $17.8 Billion in Bitcoin from Seizures and Strategic Purchases

Governments Hold $17.8 Billion in Bitcoin from Seizures and Strategic Purchases

As the governments of the world continue to confiscate Bitcoin from various people around the world, their portfolio is growing.

Data from crypto analytics firm Arkham reveals that several governments hold substantial amounts of Bitcoin, amounting to approximately $17.8 billion at current market prices. These holdings have largely been accumulated through seizures in criminal cases, although some, like El Salvador’s, are the result of deliberate purchases.

The United States is a significant holder of Bitcoin, having seized over $1 billion related to the Silk Road in 2020, one of the largest cryptocurrency forfeitures in history. Traditionally, the U.S. has sold seized Bitcoin through auctions managed by the U.S. Marshals Service, but there are indications of a shift towards more market-based approaches, including over-the-counter (OTC) sales. The timeline for future sales is often kept confidential to prevent market manipulation.

The United Kingdom’s government holds around $3.3 billion worth of Bitcoin, primarily from law enforcement seizures. For example, in 2021, the Metropolitan Police confiscated £180 million (approximately $250 million at the time) in a money laundering investigation. The UK’s tax authority, HM Revenue and Customs (HMRC), has previously auctioned seized cryptocurrency, but details about future sales or long-term strategies remain sparse, leaving market watchers speculating.

Germany, with approximately $2.2 billion in Bitcoin reserves, recently announced plans to sell about €1 billion ($1.08 billion) worth of seized cryptocurrency. This marks a departure from its previous strategy of holding confiscated digital assets. The German government has opted for gradual sales through OTC trades to minimize market impact, representing one of the largest government liquidations of cryptocurrency to date. This move is being closely monitored by other governments holding seized digital assets.

El Salvador’s approach is unique among these governments. Holding $314 million in Bitcoin, the country’s treasury has accumulated its holdings through direct purchases and mining operations as part of a national strategy initiated by President Nayib Bukele. El Salvador became the first country to adopt Bitcoin as legal tender in 2021. Unlike the other governments’ holdings, which are primarily from seizures, El Salvador’s Bitcoin is a strategic investment. Despite market fluctuations, President Bukele continues to announce new Bitcoin purchases on social media, maintaining the country’s position.

As these governments navigate the complexities of holding and potentially liquidating large amounts of Bitcoin, their decisions will significantly impact cryptocurrency markets and regulatory frameworks worldwide. Their varying strategies—ranging from the U.S. and Germany’s market-based sales to El Salvador’s strategic accumulation—highlight the diverse approaches to managing substantial Bitcoin holdings.

Key Points:

i..Several governments hold significant Bitcoin reserves, totaling approximately $17.8 billion, mainly from criminal case seizures and strategic purchases, according to Arkham.

ii. The U.S. holds over $1 billion in Bitcoin, seized in the Silk Road case, and is shifting from auctions to market-based sales, including OTC trades.

iii. The UK holds around $3.3 billion in Bitcoin from law enforcement operations, with HMRC previously auctioning seized assets, but future plans remain unclear.

iv. Germany, with $2.2 billion in Bitcoin, plans to sell around €1 billion through OTC trades, marking a shift from holding to gradual liquidation.

v. El Salvador holds $314 million in Bitcoin as part of a national strategy initiated by President Bukele, making it the first country to adopt Bitcoin as legal tender, differing from other governments’ seizure-based holdings.

Susan Guglielmo – Reprinted with permission of Whatfinger News

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