Bitcoin’s mainstream adoption is not limited to just retail investors and institutions. Now, governments across the world are accumulating Bitcoin in their portfolios. Unsurprisingly, with over 213,297 BTC, the United States government is the largest Bitcoin holder.

However, in the majority of cases, governments acquire this cryptocurrency through seizures from illegal activities. Some also obtain Bitcoin through donations or active purchasing.

As of July 29, 2024, governments around the world hold 2.6% of Bitcoin’s circulating supply, or 471,380.6 BTC, worth $32.7 billion. This trend reflects the increasing importance and recognition of digital assets in the global financial system.

The U.S. leads the world in government Bitcoin holdings, possessing 213,297 BTC, or roughly $14.82 billion, obtained through cryptocurrency seizures. A sizable portion came from the infamous Silk Road, one of the first modern darknet markets. After dismantling the Silk Road, the U.S. government seized approximately 69,000 BTC.

China, on the other hand, despite banning cryptocurrency trading and mining, holds significant BTC reserves from seizures, making it the second-largest governmental Bitcoin holder. The Chinese government now possesses roughly 190,000 BTC, valued at around $13.20 billion. Most of this Bitcoin was seized from the PlusToken Ponzi scheme, one of the largest cryptocurrency scams, which promised investors returns of up to 30%.

The United Kingdom has seized around 61,000 BTC, worth approximately $4.24 billion, from a money laundering operation. These seizures highlight the UK’s commitment to tackling financial crimes involving digital assets, placing it third among governments with the highest crypto holdings.

On the other hand, El Salvador stands out as the first country to adopt Bitcoin as legal tender in 2021. The country now holds 5,800 BTC, worth approximately $0.40 billion. Since November 2022, the government has implemented the “1 Bitcoin per Day” program, buying 1 BTC daily irrespective of its market value. This proactive approach has positioned El Salvador at the forefront of national cryptocurrency adoption.

Furthermore, Germany implemented cryptocurrency-related laws, leading to the confiscation of 46,359 BTC, worth over a staggering $3 billion. This seizure was the result of a 2013 operation against a piracy website that violated the Copyright Act. The proceeds from the operation were converted to Bitcoin.

However, as of July 12, 2024, the government had sold off its entire holdings between June 19 and July 12, 2024. This triggered a massive selloff, causing Bitcoin to fall 15.7%, from $64,547.32 to as low as $54,418.46.

That said, as crypto assets gain traction, governments around the world will likely develop regulations and may choose to actively purchase cryptocurrencies as part of their financial strategies. Market experts believe this will be driven by a desire to diversify national reserves and embrace digital finance innovations.