The US Government and Bitcoin Auctions: Here’s What Investors Need to Know

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It’s no secret that crypto assets like Bitcoin (CRYPTO:BTC) are under intense scrutiny from governments around the world, and investors in this space are likely to face more regulations. stringent in the years to come. In this segment from Backstage Pass, taped Dec. 20, Fool.com contributors Jason Hall and Rachel Warren discuss a recent report that the US government routinely auctions off millions of dollars worth of cryptocurrency recovered during seizures of assets.

Jason Hall: As I said, Rachel shared this with us, about some really interesting data points and a recent CNBC article on the US government and Bitcoin.

It seems that over the last few years, I think as of 2018, 2019, when there was good data available, in terms of everything that was going on, the feds seized over 185,000 Bitcoins.

I haven’t done the exact math, but I know it’s billions of dollars, but it’s probably close to eight billion dollars, I’m guessing 185,000 times $42,000, $43,000 a piece.

Rachel Warren: A lot. [laughs]

Jason Hall: Yeah, we know it’s a lot. Now we don’t know how much bitcoin the CIA has in secret wallets.

Rachel Warren: That’s the real question guys.

Jason Hall: The real question. I am kidding [laughs] most.

Rachel Warren: Yes.

Jason Hall: Seriously, here’s our question, guys. Rachel, I’m going to ask you to throw this one here. How does this affect or change your perception of Bitcoin in any way or is it?

Rachel Warren: It doesn’t change my perception of Bitcoin. I am not currently invested in Bitcoin. I’m slowly tinkering around to learn a bit more about it, but haven’t gotten to a point where I wanted to take the plunge.

But I think if it’s something you want to invest in, add to your diversified A portfolio, it shouldn’t really come as a surprise that the government has perhaps done a better job of keeping track of crypto than he didn’t let it on at all this time.

And B, it doesn’t really change whether Bitcoin by itself can be a viable investment or not. We know we’ve seen a lot more regulation following recent tax updates, like an infrastructure bill, for government authorities around the world to crack down on bitcoin.

This is largely to stem the tide of illegal activity that often surrounds digital currency. I don’t really think it would have been reasonable to expect them to leave Bitcoin alone. I know a lot of people have said this but I think it gives bitcoin a lot of legitimacy and I think it helps it work better in a free market but in a safer way for long term investors term.

But I think what’s so funny is this article on CNBC and it was talking about how “for years the US government has maintained a side business of auctioning bitcoin and other cryptocurrencies “. “One of the next foreclosures on the auction block is $56 million”

Jason Hall: I love that the federal government has a side business.

Rachel Warren: They have an auction block? [laughs]

Jason Hall: I just want to say there’s a side hustle part, that’s right. But there is a pretty big deficit.

Rachel Warren: Well, if Uncle Sam can be a hustler, then can’t he? [laughs]

Jason Hall: That’s it.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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