Earlier this morning, the US government announced via a court document that the bitcoin stolen from the Bitfinex hack in 2016 should be returned to the exchange in kind. This Bitcoin, as it appears publicly on the blockchain via Arkham Intelligencea total of 94,643 BTC currently worth $9.4 billion at the time of writing.
Just five days before pro-bitcoin Donald Trump is sworn in for a second term, the US government appears to be about to send a significant portion of US-owned bitcoin to the Bitfinex platform. Last summer, at the Bitcoin 2024 conference in Nashville, Donald Trump pledged to create a National Strategic Stockpile of Bitcoin using Bitcoin already held by the government and obtained from hacks, seizures, etc. According to Arkham Intelligence DataThe United States currently holds 198,109 bitcoins worth over $20.1 billion. If these coins were returned to Bitfinex, it would reduce Trump’s promised strategic reserve by 47.77% to 103,466 BTC.
BREAKING: Donald Trump pledges to never sell #Bitcoin And keep it as a strategic reserve asset in case a president is elected pic.twitter.com/bbPRxlZfGZ
– Bitcoin Magazine (@BitcoinMagazine) July 27, 2024
It makes me optimistic that if the government is going to acquire large amounts of Bitcoin in the near future and in the long term, I want them to start as close to 0 as possible, because that would require them to buy into the market. More and push the price higher. The court document stated that the bitcoins must be returned in kind, meaning those coins would not need to be sold for dollars, relieving any downward pressure on the price of bitcoin from that sale. Plus returning the bitcoin to its rightful owner seems like the right thing to do, and I’m sure Bitfinex will be happy to get their coins back.
However, if the US government were to purchase Bitcoin on a large scale for a strategic reserve, legislation proposed by Wyoming Senator Cynthia Lummis would need to be signed into law. As is clear from Trump’s mere promise, he would initially hold the captured Bitcoin on the government’s balance sheet as a strategic reserve, with the possibility of obtaining more Bitcoin in other ways, but he has not made any hard promise on this. The bill proposed by Senator Lummis would require the United States to purchase 200,000 Bitcoins annually, for 5 years, until a total of 1,000,000 Bitcoins are accumulated.
JUST IN: US Senator Cynthia Lummis outlines the strategy #Bitcoin Reserve plan: "Buy 200,000 Bitcoins annually for five years. Total 1 million Bitcoin." pic.twitter.com/57ofJhc8X0
– Bitcoin Magazine (@BitcoinMagazine) November 21, 2024
However, the Bitcoin Strategic Reserve would be bullish for the country and for Bitcoin in general. Obviously, Senator Loomis’ bill would be much more optimistic among the possible outcomes, because he would buy back all the bitcoins he plans to return to Bitfinex, and then another 905,357 bitcoins. This amount of massive buying demand will likely cause the price of Bitcoin to rise significantly, especially as other governments around the world start buying as well to keep up with our government’s purchases.
Even if the Loomis bill doesn’t come to fruition, and we only get the reserve that Trump promised, I think that would still be enough to push other governments to create their own reserve as well.
There are only about 450 new Bitcoins being mined every day, and with institutional Bitcoin purchases already outpacing the new supply of Bitcoin mined this year, things could get really crazy, fast. Fasten your seat belt.
Just in: Corporate demand on #Bitcoin Already exceeds the new supply of Bitcoin this year
Rising pic.twitter.com/PyKk9Aci93
– Bitcoin Magazine (@BitcoinMagazine) January 13, 2025
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
Comments are closed, but trackbacks and pingbacks are open.