Coinbase (NASDAQ:COIN) CEO Brian Armstrong on Tuesday voiced strong opposition to the U.S. government selling its Bitcoin (CRYPTO: BTC) holdings, joining a chorus of criticism sparked by government movements of large quantities of the cryptocurrency.
The debate intensified after 19,800 bitcoin, valued at $1.9 billion, was transferred to a Coinbase Prime deposit address on Dec. 2.
"This is a huge strategic mistake. There is no price where it makes sense for the U.S. to sell any Bitcoin it has under its control," tweeted Jason Lowery, a U.S. Space Force major and author of Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin.
Armstrong echoed Lowery’s sentiment, stating, "Agreed – the U.S. government should never sell Bitcoin IMO."
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Strategic Concerns Over Bitcoin Sales
Lowery argued that the government lacks understanding of Bitcoin’s strategic value, likening the potential sale to shortsighted policies of the past.
He warned that the U.S. may later attempt to reclaim bitcoin sold off due to ignorance of its importance.
Referencing Executive Order 6102, a 1933 directive that forbade hoarding gold, Lowery suggested future policies might aim to reacquire Bitcoin in a similar fashion.
Criticism of the government’s actions extended beyond Armstrong and Lowery.
Crypto educator Toby Cunningham labeled the potential sale as “dumb,” asserting that the supply would be instantly absorbed by the market.
Meanwhile, Tether (CRYPTO: USDT) strategy adviser Gabor Gurbacs speculated the transfers could be routine custody updates rather than sales, noting, "There is also a lot we don't know. It's not guaranteed they will sell. I haven't seen any official auction information yet."
Mixed Signals and Market Implications
While the government has moved 25,999 bitcoin worth approximately $2.49 billion to Coinbase this year, analytics platforms suggest not all these transfers are intended for sale.
Spot On Chain indicated some movements could involve consolidating wallets or upgrading security for older addresses.
CryptoQuant‘s head of research, Julio Moreno, noted it was "highly likely" only 10,000 bitcoin were sold in the latest transactions, with the remaining 9,800 BTC transferred to a newly created wallet.
Currently, the U.S. government holds approximately 183,850 BTC valued at $17.7 billion across various addresses.
“The U.S. should recognize the significance of this technology before making irreversible mistakes,” Armstrong said.
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