The U.S. government is one of the world’s biggest holders of bitcoin, but unlike other crypto whales, it doesn’t care if the digital currency goes up or down in value.
That is because Uncle Sam’s stash of some 200,000 bitcoin was seized from cybercriminals and darknet markets. It is primarily offline in encrypted, password-protected storage devices known as hardware wallets that are controlled by the Justice Department, the Internal Revenue Service or another agency.
What the federal government does with its bitcoin has long been a topic of interest among crypto traders because any sale could potentially swing prices or cause other ripple effects in the $1 trillion digital-asset market.
The U.S. has been notoriously slow to convert its stash of bitcoin into dollars. It isn’t HODLing, crypto parlance for “holding on for dear life" and never intending to sell. Nor is it waiting for bitcoin to go “to the moon" so it can sell its holdings for a hefty profit. Rather, that big pile of bitcoin is more a byproduct of a lengthy legal process than strategic planning.
“We don’t play the market. We basically are set by the timing in our process," said Jarod Koopman, executive director of the IRS’s cyber and forensics services section, which oversees all activities focused on cybercrimes.
Three recent seizures alone put more than 200,000 bitcoin in the government’s coffers, according to an analysis of public filings by crypto firm 21.co. Even after selling some 20,000 bitcoin, the U.S.’s holdings are still worth more than $5 billion, the analysis shows. The size of the government’s total stash is likely much larger.
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