Latest news with #UnitedStatesDigitalAssetStockpile
Forbes
30-07-2025
- Business
- Forbes
Did Someone Loot The Strategic Bitcoin Reserve?
Photo Illustration by Ute Grabowsky/Photothek via Getty Images. On July 15 the United States Marshal Service answered a Freedom of Information Act petition with a spreadsheet that showed 28,988.35643016 bitcoins in its custody, worth about $3.4 billion as of this writing. This number is far below the approximately 200,000 coins the White House has repeatedly cited since March. The slim total ricocheted through social media and caused many to wonder whether Washington had secretly liquidated more than 80% of its bitcoin stockpile. U.S. Senator Cynthia Lummis (R-WY) labeled the move a 'total strategic blunder' and warned that, if true, it would set America back in the international race to stockpile hard digital money. Two days later, blockchain intelligence firm Arkham shared data it had collected about the whereabouts on the bitcoin blockchain of the federal government's holdings. Its analysts traced at least 198,000 coins, worth roughly $24 billion, to bitcoin addresses tied to the FBI, DEA, DOJ, and assorted U.S. Attorney offices. Arkham's fascinating thread offers detailed evidence that none of these coins had budged in four months. However, while the clarification steadied markets, it raised a valid question: why is the most transparent asset in financial history still shrouded in bureaucratic opacity while it sits on the federal balance sheet? Only four months ago, President Trump signed Executive Order 14233, 'Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile,' promising a speedy audit of every digital asset that Washington controls. The order additionally directed the Treasury Secretary to launch a dedicated office, demanded each federal agency report its holdings within thirty days, and set a sixty-day deadline for an investment roadmap outlining budget-neutral ways to accumulate additional coins. The audit is key to the administration's credibility with the public because America already sits atop the largest sovereign hoard on record. It dwarfs the UK's roughly £2 billion haul from criminal seizures and surpasses Bhutan's billion-dollar trove built from government-backed bitcoin mining projects. Yet the machinery for managing the reserve remains primitive. Last summer, the U.S. Marshals Service outsourced custody and trading of 'Class 1' digital assets to Coinbase Prime under a five-year, $32.5 million contract. The deal streamlined forfeiture logistics but placed the signing keys (and therefore control) outside the federal government. Coinbase's cold-storage vaults may satisfy procurement checklists, but they also prevent the public and lawmakers from accessing cryptographic proof that the coins exist at all, an approach that leaves the door open to rumors like last week's phantom liquidation. Transparency and the Strategic Bitcoin Reserve Executive Order 14233 was clear: within two months, Treasury would complete an audit, and within three months, the Department of Commerce would propose budget-neutral strategies for accumulating more bitcoin in the reserve. Those deadlines came and went without proactive communication about what was being done. Now, Bo Hines, who serves as the Executive Director of the President's Council of Advisers on Digital Assets, has announced that the report is expected tomorrow. If tomorrow's report is simply an accounting, that would be better than what we have today. Even without cryptographic evidence that the coins are there, if we combine the contents of a credible report with Arkham's research, we can be fairly confident that the number of bitcoins purported to be held in reserve is accurate. However, this is only part of what needs to be done. Going forward, the federal government must establish processes that will continuously provide cryptographic verification of the reserve's contents. No matter how accurate an audit is, it is only accurate at a single point in time and becomes obsolete as soon as it is published; it can say nothing about whether the coins will stay there or how we can check in the future. Achieving this transparency would be straightforward, though it would take some technical development. Since at least 2020, exchanges such as Kraken and Binance have published proof-of-reserves attestations that combine cryptographic signatures with Merkle-tree data structures so any outsider can determine whether assets exceed liabilities. Treasury could take a similar approach. It would announce a universe of reserve addresses, shuffle a satoshi among them in a transaction that anchors a Merkle commitment of seizure case numbers, and pledge to repeat the maneuver every quarter. No sensitive information would leak, but Congress, markets, and the public at large would gain much needed visibility and confidence. A Benchmark for the Digital Asset Industry Bitcoin is the first monetary instrument that allows a sovereign to prove reserves in a transparent and continuous fashion, yet so far the U.S. has continued to treat its holdings like fiat – with the source of truth being numbers typed into a spreadsheet. The confusion sparked by the FOIA response last week, and Arkham's followup research, saved the administration from market chaos this time, but next time the rumors about a loss of funds may be harder to stop – or may even be true. Robust cryptographic proof of reserves demands neither congressional action nor novel technology. Bitcoin technology already supports it, and the Treasury Inspector General already employs independent auditors. Coinbase's contract already entails institutional-grade cold storage. What remains is to get smarter about accounting for digital assets, and accepting that it is fundamentally different from accounting for legacy assets. Working out the engineering and accounting details for how to proceed would naturally follow. Cryptographic validation of on-chain funds would transform the Strategic Bitcoin Reserve from a legal document to a verifiable fact and provide a benchmark for the digital asset industry as a whole. Until that happens, the United States is asking global markets to extend trust where it could furnish proof. In an era defined by immutable ledgers, that is a fragile bargain.
Yahoo
22-03-2025
- Business
- Yahoo
President Trump Is Planning a Crypto Reserve With These 5 Coins. Should You Invest in Them?
Earlier this month, U.S. President Donald Trump announced the creation of the Strategic Bitcoin (CRYPTO: BTC) Reserve and the United States Digital Asset Stockpile. The former will hold Bitcoin -- no surprises there. The latter will hold four more of the largest cryptocurrencies: Ethereum (CRYPTO: ETH), XRP (CRYPTO: XRP), Solana (CRYPTO: SOL), and Cardano (CRYPTO: ADA). The fact that the U.S. is stockpiling crypto is exciting news for crypto investors. But are these good cryptocurrency investments? Let's take a closer look at each one. Bitcoin is the original cryptocurrency and has also been the most successful. At the time of writing, its market cap is $1.7 trillion, larger than that of every other cryptocurrency combined. Over the last three years (as of March 19), Bitcoin's price has increased by 98%, well ahead of the S&P 500's 27% return. While Bitcoin was intended as a decentralized digital currency, transactions are too slow and expensive for it to work as a payment method. Processing times generally range from 10 minutes to over an hour, depending on network congestion, and fees are around $1 per transaction. Despite that, Bitcoin has caught on as a digital store of value, or "digital gold." The supply is capped at 21 million Bitcoin, adding an element of scarcity to it. If you're looking for a way to hedge against inflation or add cryptocurrency to your portfolio, Bitcoin is worth considering. Ethereum is the second-largest cryptocurrency by market cap, and it became popular through introducing smart contracts. A smart contract is a program built into a cryptocurrency's blockchain network to record transactions. Developers can use smart contracts to launch decentralized apps (dApps). This gives Ethereum a wide range of uses, including decentralized finance (DeFi) services, such as crypto lending platforms, blockchain gaming, and launching new crypto tokens. Because Ethereum was the first to offer smart contracts, it has a large lead in terms of market share. According to DefiLlama, Ethereum currently has $46 billion in total value locked into its DeFi applications, the most of any blockchain. On a negative note, Ethereum's performance lags behind other smart contract blockchains. The average transaction fee is $0.19 as of March 19, compared to $0.00025 for rival Solana. Ethereum has also lost 34% of its value over the last three years. You're better off avoiding Ethereum until it proves that it can reverse this downward trend. XRP is the native cryptocurrency for Ripple, a blockchain designed as a cross-border payment solution. The current system of choice for international payments, the Society for Worldwide Interbank Financial Telecommunications (SWIFT), can take three to five days for international banking transfers. Fees generally cost $15 to $50, depending on the banks involved. On the Ripple blockchain, transactions process within four to five seconds for a fee of 0.00001 XRP, a fraction of a cent. In addition to being used for its minimal transaction fees, XRP is also a bridge currency used to facilitate international transfers. With a real-world use case, XRP is one of the stronger crypto investments currently available. Over the last three years, it has topped every other cryptocurrency on this list with its 187% return. Its biggest headwind since 2020 has been a lawsuit from the Securities and Exchange Commission (SEC), but on March 19, RippleLabs CEO Brad Garlinghouse announced that the SEC had dropped the lawsuit. Solana is a competitor to Ethereum, as it also provides developers with a platform to launch dApps. The difference is Solana's unique proof-of-history system for validating transactions, which makes it a far more efficient blockchain. As mentioned above, the average transaction fee on Solana is just $0.00025. It processes over 4,000 transactions per second (tps). In comparison, Ethereum processes about 17 tps, because it hasn't developed a fast method to validate transactions like Solana has. Like all cryptocurrencies, Solana is a high-risk, volatile investment. But it's up 39% over the last three years, and its speed and low costs should continue attracting developers to the Solana ecosystem. Cardano is another Ethereum competitor that supports smart contracts and allows for the development of dApps. It helped popularize the proof-of-stake system, where people who own a cryptocurrency can pledge their tokens to be part of the transaction validation process and earn rewards. The proof-of-stake system has minimal energy requirements, and even Ethereum adopted it in 2022. One of the unique things about Cardano is the developers' dedication to using peer review and evidence-based research. This hasn't always been to its benefit, though. Cardano's development has been notoriously slow. For example, it didn't introduce smart contracts until 2021. Cardano's price has decreased by 18% in the last three years. As with Ethereum, it's best to see if Cardano can build any forward momentum before committing your money to it. Just because the U.S. government will be stocking up on these five cryptocurrencies doesn't mean you should invest in all of them. Cryptocurrency is a risky, unproven asset class. Two of the cryptos on this list, Ethereum and Cardano, have lost value over the last three years. Even though the others have done well, they're still highly volatile. As far as crypto investments go, Bitcoin is the safest option, relatively speaking. It's the most well-known cryptocurrency, and it has been the largest since the very beginning. If you're looking for cryptocurrencies other than Bitcoin, XRP and Solana are two standout projects. With Bitcoin, XRP, and Solana, you could have a solid crypto portfolio that covers multiple use cases. No matter which cryptos you choose, be careful about your asset allocation. Because of the risk involved, cryptocurrency shouldn't be more than 5% to 10% of your portfolio. Use the rest to invest in stocks, bonds, and other stable assets. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $305,226!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,382!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $517,876!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 18, 2025 Lyle Daly has positions in Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy. President Trump Is Planning a Crypto Reserve With These 5 Coins. Should You Invest in Them? was originally published by The Motley Fool
