US Dumps 80% of Its Bitcoin Stash – Senator Lummis Calls It a ’Historic Financial Blunder’

The US government just liquidated 80% of its Bitcoin holdings—and the crypto world is losing its mind. Senator Cynthia Lummis isn’t holding back: 'Selling at this stage isn’t just premature—it’s a total strategic failure.'

Fire Sale or Fumble?

While the Treasury claims it’s 'rebalancing assets,' critics argue the move reeks of old-school finance shortsightedness. Bitcoin’s up 210% since the last major government auction—but hey, who needs generational wealth when you can chase quarterly reports?

Wall Street’s déjà vu

The selloff echoes 2013’s infamous Silk Road dump, when the US offloaded 30,000 BTC at $350 apiece. Those coins would be worth $1.8 billion today. But this time, the stakes are higher—and the scrutiny’s brutal.

As the crypto market digests the news, one thing’s clear: Washington still treats digital gold like a speculative toy. Meanwhile, BlackRock’s Bitcoin ETF just hit another ATH. Priorities, people.

Confusion Over Bitcoin Custody

According to the FOIA response, the USMS oversees seized and forfeited cryptocurrencies, including Bitcoin. The number it reported—about 29,000 BTC—reflects only the coins formally turned over to that agency for auction.

I’m alarmed by reports that the U.S. has sold off over 80% of its bitcoin reserves—leaving just ~29,000 coins.

If true, this is a total strategic blunder and sets the United States back years in the bitcoin race. https://t.co/ciYf1uhy0x

— Senator Cynthia Lummis (@SenLummis) July 16, 2025

Other branches of law enforcement still have large quantities of Bitcoin in “seized” status, pending judicial decisions. Those coins aren’t part of the USMS tally.

Estimates from Arkham Intelligence and public wallet trackers show the federal government still controls roughly 198,012 BTC, worth about $23.50 billion at current prices. No on‑chain evidence suggests the US sold its reserve. Instead, the coins are held in various wallets across multiple agencies.

On‑Chain Data Paints A Different Picture

On‑chain records show the total federal Bitcoin holding has scarcely moved this year. The initial 198,012 BTC figure came from criminal and civil forfeitures. When seizures become forfeitures, the assets shift into USMS custody.

Until then, they remain off‑books for that agency. That split explains why one report cited 29,000 BTC while another pegs total holdings at nearly 200,000 BTC.

US President Donald TRUMP signed an executive order earlier this year directing that forfeited Bitcoin be held in a strategic reserve. He also asked the Commerce and Treasury departments to find ways to add to the stash without costing taxpayers extra dollars.

Beyond Bitcoin, the government holds other digital assets as part of its cryptocurrency portfolio. It has 347 million USDT stablecoins on hand. There are 59,951 ETH, valued at about $202  million.

Alright my guys. Since we now all have our panties in a jumble over the US Government „selling their bitcoin“, Id like to alert you to the fact that there is a difference between *seized assets* and *forfeited assets*.

The USMS is mainly in charge of *forfeited assets*, meaning…

— L0la L33tz (@L0laL33tz) July 16, 2025

The government also keeps 750 wBTC, worth nearly $89 million, and 40,293 BNB, which total around $29 million. Those figures push the overall crypto portfolio to about $24.25 billion in market value.

A journalist who goes by the name “Lola L33tz” filed the FOIA request. She stressed that seeing 29,000 BTC in the USMS report doesn’t mean any coins were sold.

She clarified that seized assets still held by the FBI or other agencies won’t show up in USMS custody until after the courts forfeit them.

Featured image from Pixabay, chart from TradingView