Cryptocurrency information platform Arkham posted an article stating that the US government, being one of the largest Bitcoin whales, has gained approval for a Bitcoin spot ETF and may also become the biggest beneficiary.
Summary:
SEC Chairman explains the reason for approving the Bitcoin ETF: The Grayscale case was a turning point, but it does not mean that we endorse BTC.
Background:
How will the US government, holding over 200,000 BTC, affect the Bitcoin market?
Table of Contents:
Arkham: US government may be the largest beneficiary of the ETF
US government holds over 210,000 BTC
Will the US sell BTC at a high point?
In the morning of the 11th, the US Securities and Exchange Commission (SEC) officially approved 11 Bitcoin spot ETFs, achieving a significant milestone for the cryptocurrency industry. SEC Chairman Gary Gensler also issued a statement explaining that the main reason for approval was the significant changes brought by the Grayscale case ruling, but he still emphasized that Bitcoin carries speculative risks and is used for illegal purposes.
Arkham: US government may be the largest beneficiary of the ETF
Although Gensler’s approval of the ETF does not mean they endorse Bitcoin, an undeniable fact is that the US government has indeed benefited substantially from the rise in Bitcoin prices.
According to a post by cryptocurrency information platform Arkham on social platform X a few hours ago, the US government, being one of the largest Bitcoin whales, will also become the biggest beneficiary due to the rise in coin prices after the Bitcoin spot ETF is approved:
The US government holds over 210,000 BTC
According to Arkham’s analysis data, the US government currently holds over 213,000 BTC, with a current value exceeding 10 billion US dollars, which is an increase of 4 billion US dollars compared to mid-2023.
It is understood that from November 2020 to 2022, the US government confiscated over 200,000 BTC in three different operations, from cybercriminals and the dark web market. Currently, these BTC are mainly stored in encrypted, password-protected offline hardware wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions. The specific source details are as follows:
November 2020, Silk Road seizure – 69,369 BTC, current value over 3 billion US dollars
January 2022, Bitfinex hacker seizure – 94,643 BTC, current value over 4 billion US dollars
March 2022, James Zhong, a hacker from Silk Road, seizure – 51,326 BTC, the US government still holds 41.5K BTC from this portion.
Further reading:
The US government is the “world’s third-largest BTC whale” -> Arkham: The US holds over 6 billion US dollars worth of Bitcoin online.
Will the US sell BTC at a high point?
For a long time, how the US government handles these confiscated bitcoins has been a topic of concern in the market, as any sell-off could affect the coin price.
In fact, in February last year, the US government did sell 9,861 BTC owned by Silk Road on Coinbase, and also announced that the remaining bitcoins would be sold in batches within a year. Therefore, now that the Bitcoin price is rising, investors are also concerned whether the US government will take advantage of the sentiment surrounding the possible approval of the Bitcoin spot ETF to sell.
However, looking at the past timeline, the US has been slow in converting Bitcoin into USD. The US government seems to have neither the intention to HODL nor the action to sell during Bitcoin’s skyrocketing to gain substantial profits. Jarod Koopman, Executive Director of the IRS Criminal Investigation Division, once stated:
Related reports:
Top 15 countries most interested in “Bitcoin ETF” revealed: US not in the top ten, Taiwan included?
Regulations tighten! Global Bitcoin ATM count drops by 11.1%, the US sees the most significant decline at 15.4%
US 401(k) retirement plan wants to buy Bitcoin spot ETF! Arthur Hayes warns: Too much success will destroy BTC.