It’s no secret that crypto assets like Bitcoin (CRYPTO:BTC) are facing increased scrutiny from governments around the world, and investors in this space will likely face stricter regulations in the years ahead. In this segment of Backstage Pass, recorded on Dec. 20, Fool.com contributors Jason Hall and Rachel Warren discuss a recent report that the U.S. government habitually auctions off millions of dollars’ worth of cryptocurrency scooped up in asset seizures.
Jason Hall: Like I said, Rachel shared this with us, about really interesting some data points and a recent CNBC article on the U.S. government and Bitcoin.
It sounds like, over the past few years, I think starting in 2018, 2019, when there was good data available, as far as everything that was happening, the federal government has seized over 185,000 Bitcoins.
I didn’t do the exact math, but I know that’s billions of dollars, but it’s close to probably eight billion dollars, I’m guessing 185,000 times $42,000, $43,000 per coin.
Rachel Warren: Quite 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’m kidding [laughs] mostly.
Rachel Warren: Yeah.
Jason Hall: Seriously, here’s our question, guys. Rachel I’m going to ask you to kick this one off here. How does this affect or alter your perception of Bitcoin in one way or another or does it?
Rachel Warren: It doesn’t alter my perception of Bitcoin. I’m not currently invested in Bitcoin. I slowly tinker with learning a little bit more about it, but I haven’t been at a point where I’ve wanted to take the plunge.
But I think if this is something that you want to invest in, add to your diversified portfolio A, it shouldn’t really come as a surprise that the government perhaps has done a better job of keeping track of crypto than they let on on all this time.
And B, it doesn’t really change whether or not Bitcoin in and of itself can be a viable investment. We know that we’ve been seeing a lot more regulation from recent tax updates like an infrastructure bill to government authorities around the world clamping down on Bitcoin.
A lot of it has been to stem the tide of illegal activity that often surrounds digital currency. I don’t really think it would’ve been reasonable to expect for 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 function better in a free market, but in a way that’s safer for investors in the long run.
But I think what’s so funny about there’s this article on CNBC and it was talking about how “for years the U.S. government has maintained a side hustle auctioning off Bitcoin and other cryptocurrencies”. “One of the next seizures up on the auction block is $56 million”
Jason Hall: I love that the federal government has a side hustle.
Rachel Warren: They have an auction block? [laughs]
Jason Hall: I just want to say that there is side hustle part, it’s right. But there’s a pretty big deficit.
Rachel Warren: Well, if uncle Sam can have a side hustle so can you right? [laughs]
Jason Hall: There you go.
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