The US Strategic Bitcoin Reserve may lose practically 30% of its holdings in a single authorized transfer, even when the federal government doesn’t promote a single coin.
Final 12 months, President Donald Trump signed an government order making a Strategic Bitcoin Reserve. The order directed the Treasury Division to consolidate government-held BTC right into a reserve account and promised that the USA wouldn’t promote these cash.
But, the headline quantity for the reserve could also be overstating how a lot BTC the federal government can truly deal with as a everlasting strategic asset.
Knowledge from Bitcoin Treasuries estimates that the US authorities controls about 328,372 BTC. This makes it the world’s largest recognized state holder. At right now’s bitcoin value of about $65,842, that stash is price roughly $21.6 billion.
Nonetheless, right here is the complication. A big chunk of that US holdings determine consists of BTC held by the federal government, however not cleanly government-owned within the strategic sense.
The chief order explicitly permits tendencies pursuant to a courtroom order of a reliable jurisdiction. It singles out a selected carve-out for property that ought to be returned to identifiable, verifiable victims of crime.
That exception issues as a result of roughly 94,643 BTC, about 30% of the federal government’s holdings, is tied to the 2016 Bitfinex hack.
If these cash are returned as restitution, the reserve quantity would fall mechanically to about 234,000 BTC.
The reserve quantity is actual, however the possession query remains to be open
The Strategic Bitcoin Reserve is commonly mentioned as if it have been a clear, sovereign stability sheet. In follow, it’s a authorized and accounting combine.
Among the BTC attributed to the federal government has been absolutely forfeited and is clearly below US management.
Nonetheless, some are nonetheless entangled in legal instances, restitution claims, or procedural steps that may take years to resolve.
That hole is now central to the controversy over the US reserve.
The 94,643 BTC tied to Bitfinex is the clearest instance. These cash are seen in government-linked custody, and markets depend them.
Nonetheless, if a courtroom determines they need to be returned to victims, they have been by no means actually a everlasting strategic reserve asset within the first place.
That is why either side of the general public debate can miss the purpose.
The bullish model overstates the sturdiness of the reserve if it treats each government-controlled coin as completely strategic. The bearish model overstates the market affect if it treats a restitution switch as a sovereign sale.
The authorized distinction issues for value, for sentiment, and for a way buyers interpret the Strategic Bitcoin Reserve itself.
Why the Bitfinex cash stay frozen
The Bitfinex theft concerned the theft of 119,754 BTC in August 2016, one of many largest BTC thefts in crypto historical past.
In February 2022, US authorities recovered about 94,643 BTC related to that hack, a seizure that stood out for each its scale and its timing.
The subsequent query was at all times restitution.
In January 2025, prosecutors requested a federal courtroom to approve returning the recovered property to Bitfinex as in-kind restitution, that means the BTC could be returned as Bitcoin relatively than offered first and transformed into {dollars}.
That distinction is vital for market construction.
A authorities sale or public sale would create a visual provide occasion, with timing and dimension recognized prematurely. An in-kind return pushes the subsequent resolution downstream, to the recipients.
That might be Bitfinex, its former customers, or each, relying on how the courtroom resolves competing claims.
US forfeiture process is designed to sluggish this stage. Third events claiming an curiosity in forfeited property might file petitions in an ancillary continuing. Within the Bitfinex case, that course of has develop into the core battleground.
Some prospects argue that the stolen property have been theirs individually. Alternatively, Bitfinex argues it in the end bore the financial loss after socializing losses and later making customers complete by way of inside mechanisms.
So, the end result of this issues properly past this case as a result of it may form how restitution is dealt with in future change hacks.
Till the courtroom resolves these claims or the events attain a settlement, the cash stay successfully immobilized.
That’s the reason the reserve can seem steady on-chain whereas remaining unsure in authorized phrases.
LEO is performing like a market proxy for the courtroom end result
The authorized course of stays sluggish, however merchants try to cost the end result by way of UNUS SED LEO (LEO), the change token for Bitfinex and iFinex.
Bitfinex has said that if it receives the recovered BTC, it intends to make use of 80% of the online funds to repurchase and burn LEO inside 18 months.
The corporate famous this course of may embody over-the-counter transactions, comparable to direct BTC-for-LEO swaps.
This coverage successfully turns a federal courtroom resolution into an enormous buyback pipeline. It offers the market a mechanism to invest on the timeline properly earlier than a authorized decision.
In gentle of this, Vetle Lunde, head of analysis at K33 Analysis, fashions LEO with two main worth drivers. These embody ongoing buybacks funded by Bitfinex buying and selling revenues and the anticipated future burn tied to the recovered bitcoin.
Utilizing a baseline of roughly 95,000 recovered BTC, Lunde estimates the 80% allocation would equal about 75,000 BTC. At present costs, that pool is price roughly $5 billion.
In the meantime, he calculates that the trade-revenue buybacks alone signify a good worth of about $125 million.
Nonetheless, buying and selling this catalyst is extremely risky.
Knowledge from CoinMarketCap reveals that LEO has a market capitalization of about $8 billion however a 24-hour buying and selling quantity of simply $7.1 million. That skinny liquidity profile can severely amplify value actions.
In the meantime, the large market capitalization additionally reveals that LEO is buying and selling at a roughly 60% premium to its implied truthful worth.
This marks the very best premium for the reason that prolonged interval of elevated pricing that adopted the preliminary seizure announcement in 2022.
In line with Lunde, the present premium stays noisy as a result of LEO is extremely illiquid and has concentrated possession, that means a small variety of individuals can closely skew the market.
In consequence, merchants could also be front-running a courtroom switch, or just leaning into momentum in an surroundings the place truthful worth takes a again seat.
Finally, LEO’s illiquidity will amplify the ultimate end result. A confirmed switch may push valuations even larger within the quick time period.
Conversely, a modest or delayed provide distribution may quickly compress the premium.
Why the headline might hit tougher than the precise BTC flows
The broader macro backdrop explains why this story is prone to transfer sentiment even earlier than the courtroom decides something.
Bitcoin has been buying and selling by way of a risk-off regime in early 2026.
For context, spot Bitcoin ETFs have seen sharp capital exits of greater than $4.5 billion this 12 months, amid a 5-week streak of outflows.
In that surroundings, merchants are already delicate to provide headlines, particularly something tied to state-owned BTC.
So, a headline saying the US is transferring roughly 95,000 BTC could be constructed to shock markets.
If the cash depart authorities custody, the transfer could be restitution, not a authorities sale.
And if Bitfinex receives the cash and follows its said buy-and-burn plan, the ensuing BTC movement is prone to be time-sliced relatively than dumped into the market directly.
Even on the rougher, rounded model of the maths, about 75,000 BTC over 18 months works out to about 139 BTC per day.
That might affect LEO’s value, however it doesn’t signify a big provide shock in contrast with the far bigger distribution stress Bitcoin has already absorbed from long-term holders and ETF outflows over the previous 5 months.
So, the actual market affect might come from narrative framing relatively than coin movement.
It’s because the Strategic Bitcoin Reserve represents greater than a easy stockpile of BTC. It features as a political and market sign that merchants can learn as both bullish or bearish, even whereas the authorized standing of these cash stays unresolved.
That’s the reason the “US loses 30% of its bitcoin reserves” framing is prone to set off volatility. It’s emotionally clear. It matches in a headline. It additionally strips out the authorized substance.
Nonetheless, the authorized substance is the story.
The SBR was constructed to coexist with restitution. If the Bitfinex tranche leaves authorities custody, the reserve quantity on trackers will fall, and markets will react.
However the deeper level shall be unchanged. The USA wouldn’t be backing away from its reserve coverage. It might be following the rule of regulation, which is precisely what the reserve framework mentioned it could do.