US government plans comprehensive disclosure of its Bitcoin holdings and strategic adjustments in dealing with cryptocurrencies

US government plans comprehensive disclosure of its Bitcoin holdings and strategic adjustments in dealing with cryptocurrencies

US government plans to publicly disclose its cryptocurrency holdings

On April 5, the U.S. Treasury Department will join other federal agencies in publicly disclosing cryptocurrency holdings in accordance with President Trump's executive order dated March 6. This measure aims to establish a strategic Bitcoin reserve and digital asset inventory to establish Bitcoin as an important national asset. The upcoming disclosure will shed light on which cryptocurrencies the government currently owns and what plans it has for digital assets in the future.

US Government's Long-Term Perspective on Bitcoin

The executive order requires all federal agencies to report their cryptocurrency holdings within one month. The finance minister is also tasked with creating two new executive offices responsible for overseeing the government's digital assets. This initiative aims to treat Bitcoin similarly to gold and establish a “digital Fort Knox.” Specifically, the strategic Bitcoin reserve will include Bitcoin acquired from the seizure of assets related to criminal and civil litigation, where the government has decided not to dispose of these assets.

According to BTC Inc. CEO David Bailey, Bitcoin's price volatility in recent months is due to the upcoming audit reports that led to the creation of the Bitcoin Reserve.

On April 5th, the US government must have completed a full review of its Bitcoin holdings. The findings from this audit could answer important questions about current price developments.

Data from Arkham Intelligence shows that the US government currently holds 198,012 Bitcoin, worth about $16 billion. Over the past decade, the government sold about 50% of the roughly 400,000 Bitcoin mined, generating $366 million. These assets could now reach a valuation of over $17 billion.

Proposed $200 billion bonds and their impact on taxpayers

The strategic turn to cryptocurrencies comes with a proposal from the Bitcoin Policy Institute to use Bitcoin without spending money from taxpayers. Accordingly, the institute recommends the introduction of Bitcoin-based financial bonds worth $2 trillion, which are referred to as “₿ bonds”.

These ₿bonds would use 90% of the proceeds for traditional government financing, while the remaining 10% would be allocated to purchasing Bitcoin. The interest rate on these bonds would be relatively low at 1%, which compares favorably with the current 10-year Treasury bonds, which offer an average interest rate of 4.5%.

Investors would benefit from the performance of Bitcoin through structured payouts at maturity. The bond structure guarantees full repayment and combines this with further Bitcoin-based returns, which is intended to provide investors with a mix of security and crypto-related income streams.

The institute's financial modeling suggests that these measures could provide significant savings to taxpayers. Although the price of Bitcoin has been rather stable over the past 10 years, even if the government spends $200 billion on buying Bitcoin, it could save up to $354 billion. If preferences for Bitcoin follow historical trends, significant parts of the national debt could be offset by 2045.

Additionally, the bonds benefit from tax breaks on interest and profits from Bitcoin, increasing their usefulness as a store of value for consumers. Projections suggest over 132 million households in the U.S. could benefit from these bonds, with each household on average expected to receive a payout of $3,025. Institutional and international investors would likely take up 80% of the bonds, while U.S. households would make 20% of purchases.