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Earlier this morning, the U.S. government announced via a court document that stolen bitcoin from the Bitfinex hack in 2016 should be returned to the exchange in-kind. This bitcoin, as seen publicly on the blockchain via Arkham Intelligence, totals 94,643 BTC currently worth $9.4 billion at the time of writing.
Just five days before pro-Bitcoin Donald Trump is sworn into office for a second term, the U.S. government seems to be on the verge of sending a large chunk of U.S. held bitcoin back to Bitfinex. Last summer, at The Bitcoin 2024 Conference in Nashville, Donald Trump pledged to create a national strategic bitcoin stockpile using the bitcoin already held by the government obtained from hacks, seizures, etc. According to Arkham Intelligence data, the U.S. currently holds 198,109 bitcoin worth over $20.1 billion. If these coins are to be sent back to Bitfinex — that would cut Trump’s promised strategic reserve by 47.77% down to 103,466 BTC.
BREAKING:DONALD TRUMP PLEDGES TO NEVER SELL #BITCOIN AND HOLD IT AS A STRATEGIC RESERVE ASSET IF ELECTED PRESIDENT pic.twitter.com/bbPRxlZfGZ
— Bitcoin Magazine (@BitcoinMagazine) July 27, 2024
It makes me bullish that if the government is going to be acquiring mass amounts of bitcoin in the near future and over the long term, then I would want them to start from as close to 0 as possible, because that would require them to market buy more and push the price higher. The bitcoin should be returned in-kind, the court document stated, meaning those coins will not need to be sold for dollars, relieving any downward pressure on bitcoin’s price from that would be sale. Plus bitcoin getting returned to its rightful owner sounds like the right thing to do, and I’m sure Bitfinex will be thrilled to get their coins back.
However, if the U.S. government is going to be mass buying bitcoin for a strategic reserve, then Wyoming Senator Cynthia Lummis’ proposed legislation for that would need to be signed into law. As it stands from just Trump’s promise, he would just initially keep the seized bitcoin held on the government balance sheet as the strategic reserve, with the potential of acquiring more BTC by other methods, but made no hard promise on that. Senator Lummis’ proposed bill would see the United States buy 200,000 bitcoin per year, for 5 years, until it has accumulated a total of 1,000,000 bitcoin.
JUST IN: US Senator Cynthia Lummis outlines Strategic #Bitcoin Reserve plan: "purchase 200k BTC per year for five years. 1m BTC total."
— Bitcoin Magazine (@BitcoinMagazine) November 21, 2024
However this all plays out, the strategic bitcoin reserve will be bullish for the country and for Bitcoin in general. Obviously, Senator Lummis’ bill would be the far more bullish of the potential outcomes, because it would market buy back all the bitcoin it plans to give back to Bitfinex, and then 905,357 BTC more. That amount of sheer buying demand would most likely send the price of bitcoin skyrocketing, especially as other governments around the world start buying as well to keep up with our government’s purchases.
Even if Lummis’ bill does not come to fruition, and we only get the reserve that Trump promised, I believe that is still enough to make other governments FOMO into creating their own reserve as well.
There is only about 450 new bitcoin getting mined every day, and with institutional bitcoin purchases already outpacing the new supply of BTC mined this year, things could get really crazy, really fast. Buckle up.
JUST IN: Corporate demand for #Bitcoin is already outpacing new bitcoin supply this year
Bullishpic.twitter.com/PyKk9Aci93
— Bitcoin Magazine (@BitcoinMagazine) January 13, 2025
This article is a Take. Opinions expressed are entirely the author's and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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