A rumor is quickly spreading amongst crypto buyers that the US authorities could have quietly bought off practically 170,000 BTC, leaving a fraction of its assumed holdings intact. The hypothesis started after the US Marshals Service, in response to a FOIA request, revealed that it presently holds solely 28,988 BTC valued at roughly $3.4 billion.
Many crypto buyers took this disclosure to imply that the federal authorities’s complete Bitcoin reserves had declined from the long-assumed determine of round 200,000 BTC. The declare was amplified throughout the social media platform X, the place even some public figures reacted to what seems to be an enormous strategic sell-off by the US authorities.
FOIA Request Misinterpreted
The confusion of the US authorities promoting the vast majority of its Bitcoin holdings seems to stem from misinterpretations of the particular holdings of the US Marshals Service with these of the whole federal authorities. The FOIA request that sparked the controversy was submitted by journalist L0la L33tz, and it precisely displays that the Marshals management just below 29,000 BTC. Nevertheless, this solely accounts for the Bitcoin beneath the custody of that exact company.
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On-chain knowledge from blockchain analytics agency Arkham Intelligence gives a really completely different image. In keeping with Arkham, the US authorities as an entire nonetheless holds roughly 198,000 BTC, price over $23.46 billion on the present worth of Bitcoin. These cash are distributed throughout numerous federal companies and will not be restricted to the Marshals’ holdings. Nonetheless, the misrepresentation took maintain rapidly.
Even US Senator Cynthia Lummis, who’s a widely known advocate of Bitcoin, responded to the rumor, saying, “I’m alarmed by stories that the U.S. has bought off over 80% of its Bitcoin reserves, leaving simply ~29,000 cash. If true, it is a complete strategic blunder and units the US again years within the bitcoin race.”
What If the US Quietly Bought 170,000 BTC?
The repercussions on the broader crypto market can be immense if the US authorities had certainly bought off 170,000 BTC in secret. A sale of that scale would unleash large promoting stress and trigger a robust drop within the worth of Bitcoin. This might erode confidence amongst buyers within the wider crypto market and set off a sequence response of liquidations throughout different cryptocurrencies. Such a transfer wouldn’t solely trigger technical breakdowns in worth construction but in addition cancel out the potential for governments world wide holding crypto as a type of strategic reserve.
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Furthermore, such a dump would straight contradict the federal coverage route set earlier this yr. In March, President Donald Trump signed an government order instructing all federal companies to switch their Bitcoin and digital asset holdings to the US Treasury. The order formalized the creation of a Bitcoin reserve, which was meant to acknowledge the cryptocurrency as a nationwide asset. In gentle of that coverage, the notion that the US would quietly dump the vast majority of its Bitcoin holdings appears extremely inconceivable beneath the present Trump administration.
On the time of writing, Bitcoin is buying and selling at $118,360.
Featured picture from Pixabay, chart from Tradingview.com
