In March 2023, the United States government sold 9,861 Bitcoins that it had acquired through criminal forfeitures, generating $216 million for federal coffers. At the time, Bitcoin was trading in the range of $20,000 to $22,000.
However, if the government had held onto those coins until today, with Bitcoin now hovering around $34,000, the sale could have brought in $332 million – a difference of $116 million.
The Bitcoins were originally seized from James Zhong, who was convicted in 2012 of wire fraud related to illegal activity on the dark web marketplace Silk Road.
The government still has an estimated 41,490 Bitcoins worth over $1.4 billion that it plans to auction later this year. With Bitcoin up 102% since January amid an ongoing crypto bear market, the timing of the sales could significantly impact the revenue generated.
Critics argue that the government should hold the crypto assets long-term rather than selling them for short-term gains. However, others contend the volatility makes Bitcoin too risky an investment for federal agencies.
The debate highlights the challenges governments face in managing seized cryptocurrency windfalls. While the U.S. has already generated millions from Bitcoin sales, some view the March liquidation as a missed opportunity during a period of market growth.
