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 a large 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 all the federal authorities. The FOIA request that sparked the controversy was submitted by journalist L0la L33tz, and it precisely displays that the Marshals management slightly below 29,000 BTC. Nonetheless, this solely accounts for the Bitcoin underneath the custody of that individual company.
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On-chain information from blockchain analytics agency Arkham Intelligence supplies a really completely different image. In response to Arkham, the US authorities as a complete nonetheless holds roughly 198,000 BTC, value over $23.46 billion on the present worth of Bitcoin. These cash are distributed throughout varied federal businesses and aren’t restricted to the Marshals’ holdings. However, the misrepresentation took maintain shortly.
Even US Senator Cynthia Lummis, who’s a widely known advocate of Bitcoin, responded to the rumor, saying, “I’m alarmed by reviews that the U.S. has bought off over 80% of its Bitcoin reserves, leaving simply ~29,000 cash. If true, this can be a complete strategic blunder and units the USA again years within the bitcoin race.”
What If the US Quietly Bought 170,000 BTC?
The repercussions on the broader crypto market could 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 powerful 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 additionally cancel out the potential for governments all over the world holding crypto as a type of strategic reserve.
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Furthermore, such a dump would immediately contradict the federal coverage path set earlier this 12 months. In March, President Donald Trump signed an govt order instructing all federal businesses 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 unload the vast majority of its Bitcoin holdings appears extremely unbelievable underneath 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