Wyoming Senator Cynthia Lummis sent a letter to the United States Marshals Service on Jan. 15 demanding answers for the government’s potential sale of 69,370 Bitcoin (BTC) seized in the Silk Road asset forfeiture.
Lummis characterized attempts to sell the US government’s Bitcoin holdings as a form of political spite. In an excerpt of the letter provided by Politico, the senator wrote:
“This rushed approach, occurring during the presidential transition period, directly contradicts the incoming administration’s stated policy objectives regarding the establishment of a National Bitcoin Stockpile.”
The potential sale of the Silk Road BTC was given the green light after Judge Richard Seeborg denied a petition to block the asset forfeiture.
While the forfeiture still needs more approvals before it is finalized, selling the government’s Bitcoin holdings conflicts with plans to establish a Bitcoin strategic reserve in the US.
Judge Seeborg’s denial of the motion to stay enforcement of 69,370 Bitcoin seized in the Silk Road raid by the US federal government. Source Court Listener
Related: US cleared to sell $6.5B in Bitcoin — Will it crash BTC price?
Strategic Bitcoin reserve narrative gains momentum
Proposals for Bitcoin strategic reserves are gaining momentum around the world, but the idea still faces considerable political opposition due to the novelty of cryptocurrencies as an asset class.
Fidelity Digital Assets research analyst Matt Hogan recently predicted that several nation-states, central banks and sovereign wealth funds would diversify into Bitcoin in 2025.
The analyst added that sovereign powers may begin quietly accumulating BTC once it becomes more apparent that the downside of not having an allocation is worse than the perceived risk of holding the digital asset.
In November 2024, Senator Lummis suggested the US Treasury should convert some gold holdings into Bitcoin for the national Bitcoin strategic reserve.
Bitcoin vs. gold price throughout 2024. Source: Fidelity Digital Assets
The senator said conversion of gold to Bitcoin would minimize short-term effects on the US government’s balance sheet, rather than outright purchasing or mining 5% of Bitcoin’s maximum supply.
Several analysts and industry executives predict that establishing a Bitcoin strategic reserve in the US will drive the price of Bitcoin to $1 million.
Following Donald Trump’s electoral victory in the US, legendary cypherpunk Adam Back said that a Bitcoin reserve in the US could take BTC to seven figures per coin during this market cycle.
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