Government Bitcoin Holdings Drop 12% in a Year

Government Bitcoin holdings have decreased by over 12% in the past year, according to a recent report. Government accounts now hold 2.3% of the total Bitcoin supply, amounting to 463,741 BTC, down from 529,591 BTC a year ago. This decline is part of a broader trend where two of the seven governments that held Bitcoin have completely liquidated their assets. Only El Salvador is actively increasing its Bitcoin holdings, despite agreeing to halt purchases to qualify for an IMF loan.

The US federal government is the largest national holder of Bitcoin, having seized it through criminal operations rather than purchasing it. Towards the end of Joe Biden’s presidency, the country began liquidating its BTC holdings, which is a significant factor in the decline. The US has organized its existing stockpile into a reserve to protect it from future sales.

China, another significant holder, seized nearly 200,000 bitcoins in 2020 and has not moved its holdings since. The British government mirrors China’s strategy, keeping its substantial reserves in a holding pattern. Germany enacted a complete liquidation last year to cover a budget deficit, while Ukraine performed a similar liquidation to fund its ongoing war effort. All these governments obtained their Bitcoin through criminal seizures, except for Ukraine, which accepted cross-border donations.

Bhutan has attracted international attention for its Bitcoin gains, but this comes from mining, and it has sold nearly half its supply in recent months. El Salvador remains the only government actively building its Bitcoin supply, continuing acquisitions despite political hostility within the country. The IMF appears satisfied with El Salvador’s behavior, indicating a complex political and economic landscape surrounding government Bitcoin holdings.

Despite the impressive surface numbers, the trend of government Bitcoin holdings is surprisingly fragile. Only five nations currently maintain active Bitcoin holdings, and political changes could significantly alter this environment. The decline in government holdings reflects a broader shift in the cryptocurrency market, where governments are increasingly cautious about their involvement in digital assets.