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Jason Lowery, a United States Space Force major and author of Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin, called the decision a “huge strategic mistake.” Writing on December 3, Lowery stated:
“There is no price where it makes sense for the US to sell any Bitcoin it has under its control. They have no idea what they own, and it shows.”
Lowery further warned of potential long-term ramifications, suggesting the U.S. government may eventually seek to reclaim Bitcoin it sold due to an underestimation of the cryptocurrency’s significance, potentially through measures akin to Executive Order 6102, which once prohibited gold hoarding in the U.S.
Government Transfers and Uncertain Intent
The transfer of 19,800 BTC to a Coinbase Prime address on December 2, representing $1.9 billion at the time, is part of a broader trend. In total, the U.S. government has moved 25,999 BTC (worth approximately $2.49 billion) to Coinbase this year. However, whether these transactions signify actual sales remains uncertain.
Blockchain analytics platform Spot On Chain noted that the movements might be custody actions or address consolidations. Gabor Gurbacs, a Tether strategy adviser, echoed this sentiment, stating, “It’s not guaranteed they will sell. I haven’t seen any official auction information yet.”
CryptoQuant’s head of research, Julio Moreno, speculated that only 10,000 BTC were sold during the latest transactions, with the remaining 9,800 BTC sent to a newly created address.
Industry Leaders Voice Concerns
Coinbase CEO Brian Armstrong joined the chorus of critics, agreeing with Lowery that the government’s decision to sell Bitcoin could be shortsighted.
Crypto educator Toby Cunningham also weighed in, suggesting that the Bitcoin market would quickly absorb any government-sold supply. Another observer linked the decision to political motivations, commenting that “Biden will do as much damage as he can before he leaves office.”
Implications for Bitcoin and the Crypto Market
The U.S. government’s actions have sparked volatility in Bitcoin prices. Following the December 2 transfer, Bitcoin briefly dipped nearly 3% to $94,500 before recovering to $96,000. Observers worry that additional government sales—or the perception thereof—could exacerbate selling pressure.
Despite these concerns, the government still holds a substantial 183,850 BTC, valued at around $17.7 billion across various known wallets, according to Spot On Chain.
