Crypto industry executives were quick to point out the folly of the United States government’s decision to transfer $1.9 billion of Bitcoin to Coinbase, with some calling it a “huge strategic mistake.”
“This is a huge strategic mistake. There is no price where it makes sense for the US to sell any Bitcoin it has under its control,” said United States Space Force engineer Jason Lowery on X on Dec. 3.
“They have no idea what they own, and it shows,” he added before continuing:
“Remember this post when they inevitably try to justify a new version of EO 6102 to reclaim the Bitcoin they sold off due to their ignorance about the true significance of this technology.”
EO 6102 is an executive order signed in 1933 by President Roosevelt “forbidding the hoarding of gold coin, gold bullion, and gold certificates” in the United States.
On Dec. 2, the US government transferred roughly 19,800 Bitcoin (BTC) worth $1.9 billion at the time to a Coinbase Prime deposit address.
Coinbase CEO Brian Armstrong concurred, adding “Agreed - the US government should never sell Bitcoin IMO.”
Brian Armstrong agreed that selling BTC was a bad idea. Source: Brian Armstrong
“If they are dumb enough to sell (which we all know governments are dumb), then that supply will get eaten up instantly.” said crypto educator Toby Cunningham, while others quipped, “Biden will do as much damage as he can before he leaves office.”
So far, the US government has transferred a total of 25,999 BTC worth around $2.49 billion to Coinbase this year. However, these transfers appear to be custody actions rather than sales, as observed by the analytics platform Spot On Chain.
Tether strategy adviser Gabor Gurbacs also suggested that there is a chance that the US government is consolidating wallets or upgrading old addresses.
“There is also a lot we don’t know. It’s not guaranteed they will sell. I haven’t seen any official auction information yet,” he added.
Head of Research at CryptoQuant Julio Moreno said it was “highly likely” that only 10,000 BTC were sold in the most recent movements, as these were sent to Coinbase Prime, and the remaining 9,800 BTC went to a newly created address.
According to Spot on Chain, the US government still holds around 183,850 BTC worth around $17.7 billion across various known addresses, the platform revealed.
Crypto balances on US government’s known addresses. Source: Spot On Chain
Bitcoin prices dipped sharply at the time of the transfer, falling almost 3% to $94,500. However, the asset has since recovered to trade at around $96,000 at the time of writing.
Magazine: Legal issues surround the FBI’s creation of fake crypto tokens
