In recent developments, a Freedom of Information Act (FOIA) request has unveiled intriguing details regarding Bitcoin (BTC) holdings managed by the US Marshals Service (USMS). According to the obtained documents, the agency controls a total of 28,988.3564 BTC, valued at around $1.6 billion based on a disclosed price that appears outdated compared to current market values. This discrepancy highlights that the USMS is using a BTC valuation of $56,000, while the market price is closer to $119,000, raising eyebrows among enthusiasts and analysts alike.

Are the Figures Accurate?

Independent journalist L0la L33tz, who spearheaded the FOIA request, underlined the significance of this revelation. “We approached the USMS to gain clarity on their Bitcoin holdings, and the response reflected a total of approximately 29,000 BTC,” she noted. This request was formally submitted on March 24 and the information was released much later on July 16, igniting discussions about the government’s role in the Bitcoin landscape.

The findings have sparked a wave of reactions throughout the cryptocurrency community. Some industry leaders expressed shock, underlining how the holdings were substantially less than widely assumed. Senator Cynthia Lummis critiqued the administration’s apparent liquidation, stating: “The fact that the US has sold off more than 80% of its Bitcoin reserves is alarming. It poses significant risks for the nation’s position in the cryptocurrency realm.”

In a move that underscored the journalistic breakthrough, David Bailey, the CEO of Bitcoin Magazine, congratulated L33tz on this scoop. He remarked, “We now see how many Bitcoins the US government holds, and it’s markedly lower than anticipated. This revelation could be a catalyst for market movement.” Furthermore, he humorously speculated on political implications in a hypothetical scenario involving future administrations repurchasing sold reserves at a premium.

L33tz took to social media to elucidate the distinction between types of assets, clarifying, “The USMS primarily handles forfeited assets, which are those deemed property of the government post-judicial proceedings. It’s crucial to differentiate this from seized assets that might be under the purview of other agencies like the DEA or FBI.”

This distinction raises essential considerations as many analysts believe existing estimates of government-held Bitcoin have been heavily influenced by data from platforms like Arkham and Bitcoin Treasuries, which aggregate generalized asset figures rather than the formally forfeited assets listed by the USMS. “The oversight in relying on these sources could lead to inflated perceptions of actual governmental Bitcoin ownership,” L33tz explained.

The FOIA response has also illuminated the operational practices of the USMS concerning the management of Bitcoin. Historically, the agency has liquidated such assets through public auctions, a process reminiscent of early Bitcoin sales from high-profile cases like that of Silk Road. L33tz pointed out, “The list I received reflects assets not actively traded unless authorized for auction, indicating these holdings are primarily awaiting such events.”

This has led to fresh speculation about potential undisclosed sales during the Biden administration. Matthew Pines from the Bitcoin Policy Institute remarked, “Great job by Lola. If accurate, this lends weight to my suspicion that there may have been covert sales of Bitcoin during the transition period. My understanding is that total BTC in government possession might surpass these figures, but the details remain classified.”

Others in the industry, like Alex Thorn from Galaxy Digital, cautioned against assuming the FOIA figures encompass the totality of federal Bitcoin holdings. “It’s imperative to recognize that the US Marshals Service is likely not the sole body managing Bitcoin assets for the government,” he noted, alluding to broader conversations regarding potential reserves and strategic oversight.

The ramifications of these revelations are profound for market dynamics. The long-held belief that the US government possessed close to 200,000 BTC has contributed to markets shaping expectations of asset availability. With this new information, the perceived constraints may be less significant than previously considered. Vijay Boyapati encapsulated this sentiment effectively: “Astounding! The US government’s Bitcoin holdings are outpaced by individual traders, making the thought of a Strategic Bitcoin Reserve rather farcical given these figures.”

As of now, BTC is trading at approximately $118,279.