Bitcoin Forum

https://cointelegraph.com/news/bitcoin-us-government-largest-bitcoin-hodlers-5b-in-btc-report

So, based on the news, all the Bitcoins they have now come from seizures of illegal activities involving certain individuals or companies. This includes funds from hacked accounts, especially linked to the Bitfinex hack and Silk Road.

There's still more Bitcoin in the balance, as mentioned in the news, so it's likely the government will schedule another auction or maybe just sell it to an exchange once they get the necessary approvals from the relevant government department. There's no fixed time for when they'll do this, but it might have an impact on the market. However, since similar situations have occurred in the past, people might adjust and not see it as a major sell-off. If it does affect the market, it might be a short-term thing.

What's really interesting is that massive Bitcoin auction back in 2014, specifically. As stated below.



So, according to this  article (https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F719920140702) from July 2, 2014, Tim Draper made a significant purchase. I'm curious about how much he's made with Bitcoin's current price, so I made a simple computation. If we consider the price back then, around $600 per Bitcoin, and use data from CoinMarketCap:

In July 2014: $600 x 30,000 BTC = $18,000,000
In October 2023: $28,000 x 30,000 BTC = $840,000,000

Based on these numbers, it's safe to say he made a huge amount of money from that purchase, potentially even hitting the $1 billion mark if he sold during the last bull run when Bitcoin hit $60,000.

I am not surprised to know that the USA government is actually a big holder of Bitcoin and they are actually taken from different personalities and organization who got caught by the law doing illegal acts or business. I am wondering when they would auction a chunk of that holding am sure many could be interested to bid and enjoy the possible profits just like what Tim Draper did in the past. On the other hand, this is telling us that actually the USA government is looking at Bitcoin with real value and something that is not illegal, otherwise maybe they would just destruct them...just like what they could be doing with illegal drugs seized on different operations.

If they were a bit smart what they would do is HODL them and keep accumulating as many as they can seize, as I am sure that in the future Bitcoin reserves for the states are going to be like gold reserves today. The only thing is they need a much smaller space than Fort Knox to store large amounts.

The government always publishes its intention to auction seized coins and people are given the opportunity to bid. The last sale by the US government happened sometime in July this year when about $300 million worth of Bitcoin was moved from two marked government wallets. The price was affected slightly (0.8%) and Bitcoin recovered in a few days.


The government is also hodling to make profit from Bitcoin. If not they would have sold the seizures a long time ago. I suspect that they will wait till the bull run before another trench will be sold so that the price will increase. It might also be that the reason why Nobuaki Kobayashi, the Mt Gox trustee postponed the deadline of the base repayment to victims was because they also want to make more gains.   

I mean, it would make zero sense for them to simply just send the BTC to a burn address or to just destroy the keys altogether if they can just sell it legally. Comparing it to illegal drugs makes zero sense either because it's literally illegal to buy/sell/use illegal drugs.

Yeah I remember that auction back in 2014. The auction was blind so you didn’t know what the high bid was. And you could tell there was demand when people were paying more than market rate for the bitcoins.

Many back then thought that Tim was crazy for spending all that money but it obviously was an incredible investment.

Let’s just hope the US Government won’t start dumping the rest of those coins in the near future. I remember last time they sold there was a huge dump on bitcoin.

It's not just the US government holding big amounts of BTC. There were rumors about my country's government holding more than 12 billion USD worth of BTC, which were confiscated from criminals years ago(when the BTC price was way lower). I don't know if those rumors are true, though. What if all the governments, that are holding confiscated BTC decided to sell all their BTC at once? We might be witnessing a 10K-15K Bitcoin price, if such thing happens.
Tim Draper did something smart back in 2014. Should we really discuss his decision here? I doubt that he is a hardcore HODLer, but I might be wrong. There's too much room for speculation, when we are talking about crypto whales and their crypto wealth.

He took a big gamble investing in that massive pile of Bitcoin. Yeah, it might have looked like a foolish move back then because people hadn't experienced the bull run yet. He could have cashed in during the 2016 bull run when it hit $16k per piece, which I think was the all-time high at that time.

But with this coin, it's anyone's guess. As long as there's no associated address, we can't keep tabs on it. Tim's a billionaire, though, so he probably knows what he's up to. Maybe he sold some to recover his capital and make a little profit, or perhaps he's still holding on to that colossal 30k stash.


I don't think they'd dump everything all at once; they'd probably do it gradually if their aim is to liquidate. But you know, the market isn't likely to react negatively to this kind of event since it's not bad news, unless the unexpected happens.

And as Bitcoin's surge to six digits is highly probable because of the next BRRRRR-Money-Printing + The Halving + ETF approval, therefore increasing the value of those coins in their vaults, then they are now incentivized to become good actors and ensure the success of the network.

U.S. politicians will probably start a debate that Bitcoin mining within some regions of the United States should be encouraged.

Bitcoin, breaking political strongholds?

¯\_(ツ)_/¯

I do not think that the United States will sell 200,000 BTC at once, and even if it does, it will be in an auction, which means that it will be sold at intervals, and there is no time frame that forces them to sell, which is different from what happened, for example, with LUNA, where it was forced to sell 60,000 bitcoins, and the matter Which made the market trend change.
They may be used as news to spread FUD but for years the US has continued to hold bitcoins taken from money laundering operations or raids on drug dealers.

The government will be happy because he bought those currencies and will pay taxes on them.

That's a very huge amount of bitcoin, which would really have a great impact on their economy, but if they can keep holding it until the price goes above $300k–$500k, selling the bitcoin now at auction will cause the market to dip, and the government will still utilize the money and might still see the value of the sold coin grow anytime they look back at the old wallet. If they sold all that holding, do they think they might be able to archive such an amount of holding in the near future? IMO, I think they might not be able to get such an amount from hackers unless they will have to buy and reserve, of which now is the opportunity to still hold tight to what they have rather than selling off.

I doubt the government would consider what they possess as investment funds. Remember that the bitcoins they have likely stem from illegal activities, so their inclination would probably be to sell them once there are no claims and if the court orders it, those assets will become state income. If the US government had a Bitcoin investment program, they'd likely make it public knowledge. After all, the money they manage primarily comes from taxes, so keeping it secret is unconstitutional.

Regarding the seizure of Bitcoin, I don't think it will be auctioned. The market has changed significantly since 2014, with a much larger trading volume, making exchanges very liquid.

As we can see on CoinMarketCap, Binance has a daily trading volume of over $6 billion, while the U.S. holds only $5 billion. They could handle it, but it might cause an instant dip and short-term panic. So, they probably won't do that since it would harm the crypto market they've already regulated. I believe it will be sold on a schedule, gradually rather than all at once.

https://coinmarketcap.com/rankings/exchanges/

I think it’s fine that they are selling Bitcoin. At least we will have good auction and true investor would go buy it and hodl it even more likely. I hate to say but government treasury is not the place where we should expect Bitcoin getting hodl. There is more concrete reason behind this; government hodling it and selling in the future when BTC price is very high could dilute the market quickly. I mean today’s 5 billion could be worth more than 10-15 billion (assuming) and this will disturb the liquidity and resistance. It’s far better this goes in the wallet of private investors who would just sell small chunks now and then thus keeping the ecosystem clean. It’s not joke man, it’s 1 million plus bitcoins we are talking about.

I wonder when they will sell the bitcoins that were seized from chipMixer. Thousands of bitcoins were seized on March 15 and we have not heard any news from them. Such influence will give the United States leverage, as they can classify some currencies as bad because of their connection to some activities, confiscate them and sell them again to make them clean.
I read before about a person who bought Bitcoin from an auction in which coins confiscated from one of the mixers were sold at a price lower than the price of Bitcoin at that time.

As far as I know, the US is not the only country that has the largest Bitcoin holdings; there are also Russia, Germany, China, South Korea, and Japan. In addition to that, despite the frequent harassment done by the US government on exchanges related to Bitcoin or cryptocurrency, they actually have a lot of Bitcoin holdings.

That is, they seem to want to be the only ones holding Bitcoins in the whole world, something that is impossible and can never happen. And here are some of the countries that also hold Bitcoin:

https://originstamp.com/blog/the-top-10-countries-that-use-crypto-and-bitcoin-the-most/

That's precisely 1909.4 BTC in total. However, it's not just the USA that has seized the total amount; the government of Germany has also joined the party. It's likely that it was already included in the total amount of Bitcoin they are currently holding, and, just like other bitcoins they've sold on an exchange, the same thing would happen to this batch. It seems like an auction might not be needed anymore, as there are reports that they've sold some of the bitcoins to Coinbase.

https://www.coindesk.com/policy/2023/03/15/germany-and-us-seize-over-46m-crypto-tied-to-chipmixer-investigation-europol/

Just recently this year  ;
U.S. Government Sold $216M of Seized Silk Road Bitcoin This Month (https://www.coindesk.com/business/2023/03/31/us-government-sold-216m-of-seized-silk-road-bitcoin-this-month/)

This news appears many times in history and it was used to make people panic and shake their weak hands. If you don't have weak hands but have strong hands, don't use leverage, don't trade futures, I am sure you can hold your bitcoin and go through market shakes without big stress and loss.

Bitcoin Supply Visualized (https://www.blockchaincenter.net/bitcoin-supply/).
Bitcoin top 100 rich list (https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html).

I used to be very fearful when read such news but with more experience in Bitcoin market, I no longer care about it.
U.S. Attorney Announces Historic $3.36 Billion Cryptocurrency Seizure And Conviction In Connection With Silk Road Dark Web Fraud (https://www.justice.gov/usao-sdny/pr/us-attorney-announces-historic-336-billion-cryptocurrency-seizure-and-conviction). Read this news as your entertainment but don't feel panic.

@Distinctin, aren't you fed up with the bad and fake stories that come from that site?

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It seems to me that someone has spread this kind of news right now because they want to create panic when the price rises, and there is no solid evidence that the US government has even 10% of the amount that is being speculated about. Even if by some chance it is true, I don't see a problem with that, Satoshi made Bitcoin for everyone, including the US government.

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In case you did a little research and effort, you would have found out that Tim Draper invested the purchased BTC shortly after he bought it. This means that he did not make a direct profit from it, but it is possible that he earned even more through the investment he made.

I don't know how true this is, but I do not believe it to be true.
It's no surprise the US government has a certain amount of Bitcoin but I don't believe it's up to that amount.
I'm more concerned to know if those Bitcoins find their way to the real owners.
As the article said, some of those coins are from hackers, those hackers stole people's funds, so does the government return them or even try to return them?

And if this is true, Selling off all those coins at once will mostly affect the price of Bitcoin and I believe that's one of the ways they use to manipulate the market.
Funny how no matter the amount they sell the Bitcoin, they'll still make a profit because it was acquired for free.

You should not be surprised since most of the highest seize amounts of Bitcoin since the beginning came from the US. They probably holding more if they didn’t auction their Bitcoin holdings during the early years when the price still not discovered. There’s still a lot of illegal operations coming from US through ICO scams, Money laundering and other form of services that will contribute to the US stash.

In addition, US still tracking down even those old fraud that happened long time ago and seize their money once they traced it like this one https://www.cnbc.com/2022/11/07/feds-seize-3point36-billion-in-bitcoin-the-second-largest-recovery-so-far.html which is already more than half of the total 5B declared on this topic.

Haha, First of all, look at the news source, hehe a fud creator + most of the time shitposting media, Besides that, I don't want to be rude on it, but taking the news into count I cant understand this situation right now should I call it hypocrisy? These double standards why?

For a long SEC and the US government have been pretending to be anti-Bitcoin and pro-CBDC and blah blah, so why they are holding such immense amounts of Bitcoins? TBH I can be sure that's just a rumor becasue their own words are not even clear and after reading a couple fo the posts, I can be more sure about it.

This is something to think about, isn't it? If the US government had "positive" plans for the bitcoin, it would continue to hold it. And as we see, they are trying to get rid of this “toxic” asset for them. How can we talk about Fort Knox here?

Another scenario is possible: the government sells only “public” bitcoin, continuing to accumulate BTC “below the radar”.

I know they have an issue of fake news but I did some confirmation of this particular report and it seems like it's also reported in another news outlet.

https://www.forbes.com/sites/michaeldelcastillo/2023/06/16/us-government-owns-way-more-bitcoin-than-any-other-countryso-why-arent-they-selling-it/?sh=50bf978f1f32

So it's safe to assume that such information is true.

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I'm not sure if there's a specific website to verify the accuracy of the statement, but since it's in the news, I assume they wouldn't report it without a basis. Otherwise, it could damage their reputation. There's one site called the "US Government Seized Bitcoin Sales Tracker." Maybe you can check it out and see for yourself.

https://jlopp.github.io/us-marshals-bitcoin-auctions/

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The news didn't state that he invested the amount directly after the purchase. It was clearly mentioned that he "intends" to partner with Vaurum, which means there hasn't been an investment yet. But regardless of whether the investment pushed through or not, what was invested is Bitcoin. If the business succeeds, he'll grow his Bitcoin holdings and increase their value in the long run. So, my initial calculation might actually be quite understated.

So many people criticized Tim Draper for his buy back in 2014 and for a little while he seemed like an idiot as I believe he lost something like 75% of his investment almost immediately. The story from there has been shocking though and I think it will continue. The wealth of early Bitcoin investors could become insanely vast in the next rally.

Of course and I think that all the gfobiorernos in the world too, so you won't be surprised if some presidents and entities of the gfobiorerno have a lot of bitcoins and even though they come on the news and say that this is a very dangerous action, they do not recommend it also they are going to make regulations to protect their people, when they say all those things it is because people should simply leave out of that bubble of innocence where they believe that all governments are here to help people, they do not comply with having a lot of bitcoin, but also scarle money to the people who have bitcoin through taxes.

If I HODL, you HODL, they HODL, then what's the point? If we just HODL it and don't use it, bitcoin will not magically grow, especially when it's not water and can be changed with altcoins. I know bitcoin has a lot of advantages but there will be none if everyone move on HODL mode. I think that money has to be in circulation, this grows economy, this creates new things, this makes us alive. We can't develop with hodling and sleep.

Will exchanges block my accounts if I receive bitcoins from US government, that were previously used for illegal activities? Just wondering...

I mean they had the biggest one at that darknet website owner thingy, that was alone a huge one and they still probably have some of it. I think it's fine, governments could and even should own bitcoin, it does help them realize how much profit they are making.

Think about a nation that seized bitcoin at 2014, and it was just 100 million dollars, and now it is maybe 5 billion, wouldn't that nation reconsider their stance on bitcoin because of that? I would, and I am sure that "governments" are filled with people like you and me, so that means they would definitely consider that as a good thing. I believe that they may hold a lot, but they may actually consider buying even more to have some good investment structure for bitcoin.

They've put many of those in auctions and that's the whole plan and if ever they still have a lot on their stash, who's the real winner? Yeah them.

While it is intriguing on what happens to the seized Bitcoins and if it's still on their possession and if there is an audit on it, then they should release that as well.

But if it's confidential and we can't even have a glance of it and somehow they'll just announce that they still have a lot of it and they don't have plans of selling it, who cares?

This amount is small in value compared to the capabilities of the US government. They have an unlimited money printing machine and it won't take much effort for them to print another five bills. Most of this BTC that they are holding is from the Silk Road crackdown so they are likely to liquidate in the market gradually. So there is nothing to be amazed that they are not an investor, they are most likely potential sellers.

I don't surprise with how much bitcoin US have, because other big country like China have the same with US have, 194,000 BTC which they confiscated it from illegal activities such as exchange hacking, and etc. So, I think US do stupid think if want to sell all bitcoins they have on market. Because we don't know next, if the public doesn't have trust again with the dollar, that probably crash, and the dollar won't have value again. After the US government sold its BTC, the company and the government (china) will rule the economic world if Bitcoin becomes a currency that replaces fiat.

https://www.binance.com/en/feed/post/1198419

People are only too pessimistic and panic about it. The USA. will sell those bitcoins they seized from illegal activities but they will have two options. Dump it at one day or sell it gradually. Of course we know the better is selling it gradually as the market will not have big shock. However even if the USA. government will dump all those bitcoins on a single day, market will have a shock but will it be the end of Bitcoin or will it cause Bitcoin to drop to like $15,000 or lower?

I am very doubtful that it will result in too much deep crash for Bitcoin. If any crash happens, I expect it won't be worse than what we had in history.

Bitcoin historical corrections from all time highs (https://www.visualcapitalist.com/bitcoin-historical-corrections-from-all-time-highs/).
Bitcoin crashes - A visual history (https://www.finsyn.com/bitcoin-crashes-a-visual-history/).

That would be a remarkable turn of events if it were to happen worldwide, where FIAT currency collapses, and Bitcoin reigns supreme. It's not impossible, but it's unlikely because no country would willingly adopt something they can't control. We're well aware of how corrupt some nations can be, even if they may appear progressive, so I have my doubts.

As for the Bitcoin they are holding, it does seem a bit odd to hold onto it since it was confiscated from illegal activities. In a typical scenario, it should be destroyed, but unlike illegal drugs and weapons that can be disposed of, Bitcoin is a digital asset. Therefore, they've chosen to monetize it and consider it as income. Since they've publicized the amount of Bitcoin they've confiscated, the public will indeed be keeping an eye on it, and they might not have many options other than selling it to exchanges.