Bitcoin: government engagement contradictions
Reprinted with permission from Daniel Pocock.
09:00 Thu, 19 Feb 2026
In 2025, US President Donald Trump signed an executive order creating the US federal Bitcoin reserve.
When cryptocurrencies are seized from criminals, they are placed in the reserve. If the reserve did not exist, the authorities could sell seized Bitcoins on a Bitcoin exchange.
From a market perspective, the government's willingness to hold Bitcoins rather than selling them immediately has various implications.
If the government was selling them, this would put downward pressure on the prices.
Instead, holding them gives them more legitimacy and may entice other people to purchase Bitcoins.
Governments with a strong attitude against climate change would be far less likely to hold Bitcoins due to the associated electricity waste.
Ultimately, some Bitcoin founders and proponents argued for Bitcoin to exist as a currency out of government control.
When I hear Bitcoin proponents talking about their enthusiasm for government participation, it raises questions about the philosophy of Bitcoin. Has the philosophy changed over time, is it viable for different participants to have different philosophies or is the question of philosophy irrelevant?
For those who like the philosophy of having some wealth in an asset outside legal and political control, their needs are already well met by gold and silver bullion. The notion that Bitcoin would be a convenient digital replacement for physical metal ownership is a dangerous fantasy. The very people who could benefit most from buying gold and silver bullion are giving their money to the crypto barons. The crypto barons take that money and buy more gold and silver for themselves.
A small government holding some Bitcoin is not the same as a government controlling the Bitcoin market.
Nonetheless, as a large government acquires more and more Bitcoins they will have a bigger incentive to control the technology, for better or worse. Some US government agencies and some of the largest US tech companies may have the resources to outsmart the Bitcoin industry. Maybe they already have done so. Maybe they even created it in the first place.
In comparison, if the government put the same amount of money into equities, buying shares in small businesses, this funds innovation and new ideas. New companies create jobs and the equities eventually pay dividends to the investors. Bitcoins don't create jobs and they don't pay dividends.
In fact, I think the real motivation for those people who want the government to hold Bitcoins is the realization that the process of building a reserve takes more Bitcoins out of circulation. This, in turn, pushes up the price. Eventually, the private owners of Bitcoins who promoted that policy, having already acquired their Bitcoins at cheaper prices before the federal government, will be able to sell their personal holdings of Bitcoin for a profit. In other words, over time, the system transfers wealth from the public purse to the private purses of the people who got in first. The public do not appear to gain any benefit from that transaction.
Continue reading the inconvenient truth about cryptocurrency.
The author holds an MIT MicroMasters in Data, Economics and Development Policy. He does not hold any crypto "assets". Swiss financial regulator FINMA will neither confirm nor deny an investigation on this blog precipitated the resignation of their deputy CEO . █