The Bitcoin Reserve That Doesn't Exist

A month ago, the crypto community latched onto headlines from Arkham Intelligence and kickstarted a misleading news cycle that lasted the entire month of July.

Headlines from Arkham Intelligence in June sparked a month-long cycle of false news stories. Ambiguous terms and play-by-play commentary about bitcoin movements linked to government agencies led many to believe that governments were buying bitcoin as a reserve asset, timing their purchases and sales for maximum gains.

However, only El Salvador has been buying bitcoin with public funds for investment or reserve asset purposes.

All other governmental holdings of bitcoin are not held as reserves, nor did those governments buy those coins using public funds. Instead, they are almost exclusively seized assets from criminals with courts authorizing their temporary custody.

For example, the US government has held bitcoin seized from James Zhong, Ryan Farace, Konrads Voits, Darcy Wedd, and dozens of other criminals.

US courts have authorized the US Marshals and other temporary custodians like Anchorage Digital to hold those bitcoin as proceeds of crime until they are lawfully disbursed, auctioned, liquidated, or transferred.

Emboldened by an outpouring of social media support for governments buying and holding more bitcoin — even though only one government actually buys and holds bitcoin — lobbyists began writing letters to influence supposed trading policies governing these governments’ bitcoin.

For example, UK lobbyists wrote a letter asking a chancellor to not sell 61,000 government-controlled bitcoin.

Of course, that chancellor has no authority to refrain from selling those bitcoins, which are mostly seized proceeds of crime.

Mistaken believers continued to track Arkham’s dashboard of government holdings, pleading with lobbyists and regulators to buy more bitcoin or refrain from selling.

Media coverage hit its zenith last week at the world’s largest gathering of Bitcoiners at Nashville’s Music City Center convention hall.

The keynote speaker headlining the conference was Donald Trump.

Punctuated by a string of words that ended in a purposeful substitution of the word ‘reserve’ for ‘stockpile’ that flew over the heads of his applauding audience, Donald Trump’s speech on July 27 marked the peak in this news cycle about non-existent governmental bitcoin reserves.

Trump promised to ‘take steps’ to transform ‘vast wealth’ held by the US government into a ‘strategic national bitcoin stockpile.’

He never promised to buy any bitcoin with public funds, nor did he promise to change any rule governing the US Marshals, bankruptcy custodians, or other court-approved holders of bitcoin.

In the end, he promised no measurable change to existing policies governing the US government’s bitcoin holdings.

As before, US government agencies temporarily hold the proceeds of crime as they await court orders to liquidate or disburse that bitcoin to victims or public funds. Those policies will continue.

In his signature, meandering speaking style, Trump made this non-promise from the stage of the Bitcoin 2024 conference.

He has not promised to add bitcoin to a national strategic reserve, because ‘strategic reserve’ is a controlled term with specific meaning.

The US has true reserves of oil, gold, grain, foreign currencies, machinery, and other critical assets for use in times of crisis.

The US also has a ‘strategic national stockpile,’ which is also a controlled term that defines a set of federal warehouses containing medical supplies — not financial assets held by governments for speculative or reserve purposes. 

Because Trump’s scriptwriters were aware that he doesn’t have the authority to promise to add bitcoin to any strategic reserve nor the pharmaceutical national stockpile, he simply promised to “keep 100% of all the bitcoin the US government currently holds or acquires.”

That changes nothing. The US government already holds 100% of the bitcoin it acquires unless a court authorizes disbursement, auction, liquidation, or transfer.

Even as president, Trump would never have the authority to prevent US courts from ordering disbursement of seized bitcoin to victims or public funds, and so, he has promised no change whatsoever.

Of course, media publications feverishly covered Trump’s commentary on US government bitcoin holdings as a breaking news event.

The supposed news topped the opening sentence of the conference organizer’s official recap.

As with the entire news cycle about governments buying billions of dollars worth of bitcoin, it simply never happened.

米国政府は、190以上の国と同様、戦略的なビットコインの準備や備蓄を持っていません。

いくつかの政府は犯罪者から押収したビットコインを保有しており、裁判所の指示が出るまでそのビットコインを保管しています。

ある政府、エルサルバドルは公的資金を使ってビットコインを購入しています。

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