Coinbase CEO Brian Armstrong recently posted on X (formerly Twitter) that the United States government “should never sell” its Bitcoin holdings. Notably, the U.S. authorities have a history of selling confiscated Bitcoins, including a previous sale of 9,861 BTC worth $216 million in March 2023.
The statement comes after a recent transaction has ignited concerns that the U.S. government might be planning to sell its seized Bitcoins. A wallet tagged by Arkham as “U.S. government: Silk Road” transferred 10,000 BTC, worth over $954.6 million, to Coinbase.
It’s worth noting that the U.S. government still holds around $17.5 billion worth of Bitcoin, alongside other crypto assets like ETH and USDT. The fate of these holdings remains uncertain, and the recent transfer to Coinbase has only added to the speculation.
A Huge Strategic Mistake
The coinbase CEO attached another tweet belonging to a U.S. Space Force major, Jason Lowery, who noted his strong belief that the U.S. government selling its Bitcoin holdings would be a “huge strategic mistake.”
He further emphasized that there is no price point at which selling Bitcoin would make sense for the U.S. government, implying that Bitcoin’s long-term value and potential are too great to be sold. Lowery also criticized the government for not fully understanding the value and implications of the Bitcoin they hold.
Interestingly, Bitcoin’s consistent value appreciation since its inception makes it a potentially lucrative investment for the U.S. government. By holding its Bitcoin, the authorities could benefit from the potential growth. It could also provide a diversification benefit, reducing dependence on traditional assets like gold and foreign currencies.
Furthermore, as a leader in financial innovation, the U.S. selling Bitcoin could be perceived as a lack of confidence in the crypto’s potential. This would set a precedent, potentially encouraging other governments to follow suit and sell their holdings.
Speculations Met With Hopium
Coinbase involvement in the latest government BTC transaction does not necessarily mean a sale is imminent. Coinbase Prime has secured a contract with the U.S. Marshals Service to manage its digital assets. Hence, users should note that the sales are only speculation.
Meanwhile, President-elect Donald Trump’s vow to build a strategic Bitcoin reserve for America has given investors hope. His plan could potentially boost the market and increase investor confidence, leading to a sense of optimism among investors who believe that Trump’s plan will be realized.
