According to the latest report from CoinGecko, government accounts are holding about 2.3% of the total Bitcoin supply, equivalent to 463,741 BTC — down from 529,591 BTC recorded less than a year ago.
Although the absolute figures are still very impressive, the overall trend shows a decline. Among the seven governments that once owned Bitcoin, two countries have sold off their entire holdings, leaving only El Salvador that is continuing to buy more.
Is the government gradually withdrawing from Bitcoin?
Corporations like MicroStrategy often attract much attention with their massive Bitcoin holdings, but in reality, governments also account for two of the ten largest Bitcoin 'whales' in the world.
When analyzing the data in detail, CoinGecko noted some notable trends: currently, only five countries maintain active Bitcoin holdings.
The US government is currently the largest holder of Bitcoin. The crypto industry closely monitors US moves while striving for robust policy advocacy. However, it is noteworthy that the US does not buy Bitcoin, but mainly seizes it in criminal enforcement operations.
At the end of President Joe Biden's term, the US began liquidating part of its Bitcoin holdings — a crucial factor leading to the establishment of the 'Crypto Reserve Fund' under Trump. This fund is not intended to buy new Bitcoin but primarily to reorganize the current asset storage and protect against future sell-offs.
China is one of the notable but less mentioned governments holding Bitcoin, mainly for two reasons: the country has a rather hostile stance towards crypto, and unverified rumors about potential policy easing could also cause market volatility. China seized nearly 200,000 BTC in 2020 and has yet to sell it, leading to this massive holding being somewhat 'forgotten' by the market.
The UK government has a strategy similar to China: to hold a large amount of Bitcoin in a waiting state without liquidating. In contrast, Germany sold off all its held Bitcoin last July to offset its budget deficit, not due to an anti-crypto stance. However, this also means that Germany missed out on billions of dollars in profits if it had held on.
Ukraine is also selling all its Bitcoin to fund its ongoing war efforts.
All the aforementioned countries share a common point: the Bitcoin they hold comes from the seizure of criminal assets, except for Ukraine, which also receives Bitcoin from cross-border donations.
On the flip side, only two countries are actively seeking to increase their Bitcoin holdings. Bhutan has gained international attention for mining Bitcoin, but recently the country sold nearly half of its accumulated amount. In other words, currently, only El Salvador is the only country in the world actively increasing its Bitcoin reserves.
Although El Salvador has committed to temporarily halt Bitcoin purchases to qualify for IMF loans, buying transactions continue, causing dissatisfaction among some citizens. However, the IMF seems to have accepted this reality.
In summary, CoinGecko's report has unpacked the surface figures and drawn a notable conclusion: while on paper, governments hold a large amount of Bitcoin, this trend is quite fragile in reality.
In just one year, the number of governments holding Bitcoin has decreased from seven to five, and some political changes in the future could completely reverse the current situation.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do thorough research before making decisions. We are not responsible for your investment decisions.