A wave of speculation is circulating among cryptocurrency investors, suggesting the U.S. government may have discreetly divested itself of nearly 170,000 Bitcoin (BTC), significantly reducing its previously estimated stockpile. The conjecture arose after a Freedom of Information Act (FOIA) request response from the U.S. Marshals Service revealed they presently possess approximately 28,988 BTC, valued at around $3.4 billion.
This disclosure has led many crypto enthusiasts to believe the federal government’s total Bitcoin reserves have shrunk considerably from the widely accepted figure of roughly 200,000 BTC. This assertion gained traction on social media platform X, with some prominent figures reacting to what appeared to be a substantial, clandestine Bitcoin sale by the U.S. government.
FOIA Request: A Case of Misunderstanding
The notion of the U.S. government offloading a significant portion of its Bitcoin holdings seems to stem from a confusion between the U.S. Marshals Service’s specific Bitcoin holdings and the overall Bitcoin assets held by the entire federal government. The FOIA request, initiated by journalist L0la L33tz, accurately reflects the Marshals’ control of just under 29,000 BTC. However, this number represents only the Bitcoin under the jurisdiction of that particular agency.
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Blockchain analytics firm Arkham Intelligence’s on-chain data paints a different picture. Arkham’s findings indicate the U.S. government, in its entirety, still possesses roughly 198,000 BTC, an amount valued at over $23.46 billion at Bitcoin’s current price. These Bitcoin holdings are distributed across various federal departments and are not solely under the Marshals’ purview. Despite this, the initial misinterpretation rapidly gained momentum.
Even U.S. Senator Cynthia Lummis, a known Bitcoin advocate, responded to the buzz, stating, “I’m concerned by reports indicating the U.S. has liquidated over 80% of its Bitcoin reserves, leaving only approximately 29,000 coins. If accurate, this represents a major strategic error, setting the United States back significantly in the Bitcoin landscape.”
Hypothetical Scenario: A Secret Sale of 170,000 BTC
Should the U.S. government have, in fact, secretly sold off 170,000 BTC, the implications for the broader cryptocurrency market would be considerable. A sale of that magnitude would introduce substantial selling pressure, likely causing a notable decline in Bitcoin’s price. This could erode investor confidence across the cryptocurrency market, triggering a cascade of liquidations impacting various digital assets. Such a move would not only destabilize price patterns but also undermine the potential for governments worldwide to consider cryptocurrencies as strategic reserve assets.
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Furthermore, such a sell-off would stand in stark contrast to the federal policy direction established earlier this year. In March, President Donald Trump issued an executive directive instructing all federal entities to transfer their Bitcoin and digital asset holdings to the U.S. Treasury. This order formalized the establishment of a Bitcoin reserve, intended to acknowledge the cryptocurrency as a national asset. Given this policy context, the possibility of the U.S. quietly divesting a major portion of its Bitcoin holdings seems improbable under the current Trump administration.
As of the time of this writing, Bitcoin is trading at $118,360.
Featured image from Pixabay, chart from Tradingview.com