The US government has lost billions of dollars in BTC profits
The US government has lost billions of dollars in BTC profits
Bitcoin

The US government has lost billions of dollars in BTC profits

By Marco Cavicchioli - 13 Feb 2020

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According to a recent analysis, the US government has lost more than $1.7 billion in potential profits from the sale of bitcoin

The analysis, conducted by co-founder and CTO of Casa, Jameson Lopp, takes into account eight bitcoin auctions held by the United States Marshals Service (USMS) whereby most BTC seized from criminal organizations were sold.

The first of these auctions was held in June 2014, while the last one has recently ended. The USMS is the US government agency responsible for organizing auctions of assets seized from criminal organizations. 

The point analyzed by the research is the difference between how much they collected from these sales, and how much could have been collected if they had kept all those BTC for a few years and had sold them in bulk at this time. 

These sales were not made at times when the price of bitcoin was particularly high, in other words particularly attractive to the seller, but at times when the price was often low. This means that the USMS would not have chosen particularly good times to carry out the auctions

For example, the first was held about five and a half years ago, when the price of bitcoin was below $600, and the second when it was below $400. The next three were also held at times that were not particularly good for the seller, while the only two that took place at times when the price was not low were in January 2018 and February 2020, when the price was over $10,000. 

Doing some calculations, it appears that a total of more than 185,000 BTC were sold in these eight auctions, which to date would be worth more than $1.9 billion. However, the total dollar proceeds from these auctions were only about $151 million, which is less than 10% of the current value of those 185,000 bitcoins. 

If instead of selling them when the price was low, they had waited for a more propitious moment, they could have collected more than ten times that amount, even if it would have meant waiting several years. 

In total, the difference between the potential gain they could have made if they had sold them all now, for example, and what they actually managed to collect is more than $1.7 billion. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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