- Combined, nine nations have $32.3 billion worth of Bitcoin, or 2.5 percent of the entire amount in circulation. Governments are far from investing in Bitcoin, even though this may suggest a growing interest in the space nationally.
- The majority of Bitcoin that is owned by governments in the US, China, and the UK has been seized as a result of illicit activity.
- The recent sell-off in Germany demonstrates how governments have a significant impact on Bitcoin markets. Governments working together to bring down the Bitcoin markets is another issue.
According to data analytics company Arkham Intelligence, Germany sold off its 50,000 Bitcoin (BTC) assets on July 12 for a total estimated worth of $3 billion. At the end of June, the German government started selling Bitcoin through major exchanges, which resulted in a 15% decline in price. But governments in almost a dozen other countries are also hoarding Bitcoin.
A website called Bitcoin Treasuries keeps track of Bitcoin holdings, purchases, and sales made by exchange-traded funds, central governments, and both public and private businesses. According to this platform, as of July 15, governments around the globe possessed 517,414 BTC, or almost $32 billion at the current exchange rate.
These figures, according to Bitcoin Treasuries, are derived from press releases, quarterly reports, and filings with the Securities and Exchange Commission. Still, governments have not made significant investments in cryptocurrencies, even though they own 2.5 percent of the world’s 21 million BTC supply. The nine governments possessing the most Bitcoin, along with their intended uses, are shown below.
- Americas
Holdings of bitcoin: 213,246 BTC
Value estimate: $13.4 billion
The largest government holding Bitcoin is the United States; the majority of it was taken from the Silk Road dark web bazaar when it was shut down by authorities in 2013. Established by Ross Ulbricht in 2011, the website was among the first to use Bitcoin and enabled the trade of illicit goods and drugs between users. Ulbricht is presently incarcerated for life after controlling the markets. On a court order, the U.S. periodically sells the Bitcoin that was stolen from the website.
- China
holdings of bitcoin: 190,000
Value estimate: $11.9 billion
China is now the second-largest government holder of Bitcoin after it is thought to have seized all of the cryptocurrency it was holding from the Plus Token fraud in 2019. Founded in April 2018, Plus Token was a Ponzi scheme that involved mining cryptocurrencies and primarily targeted investors in South Korea and China. Before the law enforcement agency took possession of over 190,000 Bitcoin and other cryptocurrencies from the scammers, the founders were accused of stealing $4 billion in investor funds. It’s unknown how much Bitcoin has been sold by the Chinese government thus far.
- United Kingdom
61,000 BTC in bitcoin holdings
Value estimated at $3.8 billion.
Two Chinese nationals, Jian Wen and Zhimin Qian, had 61,000 Bitcoin taken from them by the UK’s Metropolitan Police in 2021. Bitcoin was worth £1.4 billion at the time. Bitcoin was associated with a £5 billion investment scam that Qian allegedly carried out in China between 2014 and 2017, taking advantage of 128,000 investors. Wen, a Qian employee, was charged by the prosecution with laundering the proceeds by exchanging the Bitcoin for cash, jewelry, and UK real estate.
- Ukraine
accumulated Bitcoin: 46,351 BTC
Value estimated at $2.9 billion.
Bitcoin was obtained by Ukraine through donations from people who supported the nation’s war efforts and seizures by the authorities. The nation seized $1.5 million worth of Bitcoin from Yury Shchigol, the former director of the State Special Communications Service of Ukraine, in 2023. Other government employees stated that they possessed Bitcoin worth more than $2.7 billion in 2020, even though the Ukrainian government may not have direct control over this cryptocurrency. Donations in the amount of $225 million in Bitcoin have been sent to Ukraine since 2022.
- El Salvador
holdings of bitcoin: 5,800 BTC
Value estimate: $364.2 million
In 2021, El Salvador, a nation in Central America, became the first nation-state to recognize Bitcoin as legal tender. The president of the nation, Nayib Bukele, is a proponent of Bitcoin and has revealed intentions to establish a Bitcoin city. Since then, El Salvador has amassed almost 5,800 BTC by using the energy from its volcano to mine the “digital gold” and purchase one Bitcoin on average every day on the open market. Analysts claim that if additional governments accept bitcoin as a reserve asset, the markets may benefit from improved protections following Germany’s abrupt sell-off.
- Bhutan
621 BTC in bitcoin holdings
Value estimate: $39 million
For a number of years, the South Asian country of Bhutan has been mining Bitcoin. The monarchy reportedly invested $540 million in its Bitcoin mining operations between 2021 and 2023. This investment, which at the time represented 21% of Bhutan’s GDP, was funded by loans given to the state-owned Druk Holding & Investments by the Royal Monetary Authority. According to Bloomberg, Bhutan is also collaborating with Bitdeer Technologies, a Singaporean company, to build a 600 megawatt Bitcoin mining farm.
- Venezuela
Holdings of bitcoin: 240 BTC
Value estimate: $15.1 million
Venezuela started taking Bitcoin in return for the Petro, their defunct money. When it was first introduced in February 2018, the digital currency was meant to replace the bolívar and was purportedly supported by the country’s oil reserves. Nevertheless, local opposition MPs opposed the Petro, and the government struggled to incorporate the cryptocurrency with public functions like paying salaries or obtaining a new passport. According to recent reports, Venezuela stopped selling the Petro in January.
- Finland
90 BTC in bitcoin holdings
Value estimate: $5.7 million
Up to 1,980 Bitcoin were formerly owned by Finland; these were taken following criminal investigations by Finnish Customs, primarily from a significant narcotics bust in 2016 that resulted in the seizure of 1,666 Bitcoin. Since then, a large portion of this Bitcoin has been sold via the Finnish cryptocurrency companies Tesseract and Coinmotion. The nation is said to have given Ukraine $50 million from the sales revenues to help with its conflict with Russia.
- Georgia
holdings of bitcoin: 66 BTC
Value estimate: $4.1 million
The source of Georgia’s Bitcoin was unclear. Still, the tiny European country most certainly got the asset through seizures by law enforcement, just way other nations have gotten their Bitcoin holdings.
Can Governments Work Together to Bring Down Bitcoin?
It is significant to remember that the majority of BTC-holding governments have previously rejected cryptocurrencies. The U.S. Securities and Exchange Commission was sued multiple times by 2024 before it finally granted approval for exchange-traded funds for Ethereum and Bitcoin.
The fact that Bitcoin has been linked to billion-dollar thefts, sanctions evasion, and money laundering has not helped it gain favor with international authorities. The assertions made by Bitcoin that it will upend, decentralize, and democratize the financial sector have not been well received by traditional authorities.
Powerful nations own $32 billion worth of Bitcoin, as demonstrated by the recent sell-off in Germany. These governments may see Bitcoin more as money associated with criminal activity that needs to be liquidated than as an asset that should be carefully maintained.
The CEO of Canada-based web3 platform Uprising Labs and a software programmer, Eric Vander Wal, outlined the detrimental effects of the sell-off. According to him, throwing a lot of Bitcoin onto the market can be interpreted as an attempt to control it, as he told Cryptonews.
Large price fluctuations are detrimental effects that may turn away investors and market visitors. Additionally, they provide short-term pressure on the token price, which prompts investors to liquidate their holdings when sentiment in the market shifts negatively, according to Wal.
After the German government started liquidating its Bitcoin holdings, the price of the cryptocurrency fell by almost 15%, reaching as low as $53,000. As of this writing, the value of the cryptocurrency has increased by almost 5% to about $62,000 for the day.
Independent German MP Joana Cotar charged that her government was taking a naive and unprepared approach to the transaction. According to Forbes, Cotar stated, “I’m not at all sure whether the government was or is aware of the consequences of its sales.”
Since nations like China, Venezuela, and Russia have already imposed stringent regulations on cryptocurrency trading, there is a greater chance that cryptocurrencies may be used as weapons in geopolitical conflicts. Bitcoin has been outright prohibited in certain places, like Zimbabwe.
Some watchers worry that governments in possession of Bitcoin may eventually band together to bring down the cryptocurrency exchanges. Uprising Labs founder Wal has thought about this possibility in theory.
Governments could control the price by strategically timing the sale of their sizable holdings to the market. Selling during poor markets and limited liquidity might lead to a carnage, according to Wal.
Negative regulatory developments could further incite selling pressure on the coin. He continued, “This possibility is supported by past government precedents and their common interest in undermining Bitcoin.”
To defend crypto markets, extraterritorial platforms, advisory boards, and policy safeguards are required in addition to the creation of intelligence task forces to look into and seize Bitcoin. Crypto-progressives such as Joana Cotar, a member of the Bundestag, are an excellent place to start.
In the long run, Wal may benefit from the creation of global standards to control government-owned Bitcoin and reduce market risks. According to him, it would make it possible for regulatory uniformity, market stability, transparency, and the avoidance of additional market manipulation.
According to Wal, this may come in the shape of a regulatory body made up of delegates from large economies with substantial holdings and global organizations. But in the end, since Bitcoin is permissionless by design, it would require social organization.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
