Thomas Daniels
According to a new estimate by Nansen, as of March 12, the U.S. government owned 195,234 Bitcoin (BTC), worth more than $16 billion. Along with Bitcoin, the government’s cryptocurrency portfolio also consists of Ethereum (ETH), which is valued at $4.6 million, yield-bearing assets like DAI and AUSDC_V2, and stablecoins like USD Coin (USDC).
Laws to Increase Bitcoin Holdings
Rep. Nick Begich recently sponsored a bill that would greatly increase the federal cryptocurrency reserves. Over the following five years, the House Strategic Bitcoin Bill aims to amass one million bitcoins, or around 5% of the total quantity. Such an acquisition would cost around $110 billion at today’s market pricing.
Market Consequences and Issues
This bill, if passed, would increase the amount of Bitcoin held by the U.S. government to over 1.1 million, surpassing the estimated holdings of the anonymous creator of Bitcoin, Satoshi Nakamoto. This degree of accumulation might improve price stability and market liquidity, which could raise the value of Bitcoin.
But there are growing worries about centralization. A significant federal purchase of Bitcoin might give the government market-making authority, affecting liquidity and price changes in ways that run counter to the decentralized nature of the cryptocurrency. Some industry insiders warn that this tactic could jeopardize the financial sovereignty tenets that form the basis of cryptocurrencies.
