The United States government continues to control a significant amount of Bitcoin (BTC), worth around $7.2 billion, according to data from on-chain analytics firm Glassnode. As of October 31, Washington’s seized Bitcoin totaled 210,429 BTC.
The U.S. Department of Justice (DOJ) and Internal Revenue Service (IRS) have become known as some of the largest Bitcoin holders in the world. Over the years, through various legal proceedings, they have confiscated large amounts of BTC, only selling a small percentage at auction.
Interestingly, those who have bought the proceeds from these auctions have profited considerably. Adding to the irony, the DOJ, more like a Bitcoin newbie than a whale, has been guilty of selling too soon. According to Jameson Lopp, co-founder of Bitcoin custody firm Casa, the government has missed out on over $6 billion in potential gains from its sell-off of 195,092 BTC.
It is worth noting that no single entity, other than Bitcoin’s enigmatic creator Satoshi Nakamoto, owns more BTC than the DOJ. The largest corporate BTC treasury, owned by MicroStrategy, currently holds 158,245 BTC, valued at $5.43 billion.
Glassnode’s data shows that the DOJ’s stash of seized Bitcoin continues to grow whenever announcements of confiscations are made. For example, in early 2022, the inventory increased by nearly 100,000 BTC, worth $3.6 billion at the time, due to legal action against individuals accused of attempting to launder the proceeds of a 2016 hack of major crypto exchange Bitfinex.
In the midst of this, billionaire Tim Draper, who was one of the original BTC auction bidders, has criticized the U.S. government for suppressing crypto growth. Draper had previously predicted a $250,000 price for BTC in 2022 and believes that policy failures are “killing the golden goose of Silicon Valley.” He argues that regulations are stifling innovation, as stated in a post from May.
In conclusion, despite the United States government’s control over a significant amount of Bitcoin, it has experienced losses due to selling off seized BTC too soon. While the DOJ’s Bitcoin holdings surpass those of any other entity, it has missed out on substantial potential gains. Meanwhile, voices such as Tim Draper’s criticize the government for hindering the growth of cryptocurrencies through policy failures and excessive regulations.