The US transferred $1.9 billion worth of Bitcoin to Coinbase, drawing sharp criticism from industry experts.
Experts suggest the government lacks awareness of Bitcoin's strategic significance, predicting potential future policy reversals.
Observers speculate the transactions may involve wallet consolidation, with no confirmation of full sales yet.
The United States government’s decision to transfer approximately $1.9 billion worth of Bitcoin to Coinbase has drawn sharp criticism from crypto experts. The transfer of 19,800 BTC on Dec. 2 raised concerns about strategic oversight, with many questioning the rationale behind such actions.
Jason Lowery, a Space Force major and author of *Software: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin, highlighted the issue. “There is no price where it makes sense for the US to sell any Bitcoin it has under its control,” he stated on Dec. 3, emphasizing the government's lack of understanding regarding Bitcoin's importance.
https://twitter.com/JasonPLowery/status/1863669823265178103
Potential Policy Ramifications Highlighted
Lowery warned that these actions might lead to regrettable policy shifts in the future. He referenced Executive Order 6102 from 1933, which mandated citizens to relinquish gold. He suggested the government might one day attempt similar measures with Bitcoin due to its failure to recognize the cryptocurrency’s strategic value.
While Coinbase CEO Brian Armstrong echoed Lowery’s concerns, others in the crypto space expressed frustration. Educator Toby Cunningham remarked, “If they sell, the supply will be absorbed instantly.” Some observers criticized the Biden administration, attributing the decision to a lack of foresight.
Insights Into Bitcoin Transfers
So far in 2024, the US government has transferred 25,999 BTC worth approximately $2.49 billion to Coinbase, according to Spot On Chain analytics. However, experts indicate that not all transactions signify sales. Analytics suggest the latest transfer involved the sale of 10,000 BTC, with the remaining 9,800 BTC moved to a newly created address.
Tether strategy adviser Gabor Gurbacs noted that these could be wallet consolidation efforts or upgrades of older addresses. He also mentioned the absence of official auction announcements, leaving room for speculation about the government’s intentions.
Market Reactions to the Bitcoin Movements
Bitcoin prices reacted sharply to the Dec. 2 transfer, dropping nearly 3% to $94,500 before recovering to approximately $96,000. Analysts have pointed out the volatility induced by such large-scale transactions, especially when linked to high-profile entities like the US government.
According to data from Spot On Chain, the US government still controls approximately 183,850 BTC across multiple wallets, valued at $17.7 billion. These holdings, originating from high-profile seizures such as the Silk Road case, represent a significant stake in the global cryptocurrency market.
While speculation continues about the government’s intentions, no official statements have confirmed whether the transferred Bitcoin will be sold entirely. Analysts suggest these actions could influence market trends, raising questions about the role of government-held cryptocurrency in shaping financial policy and market stability.
