Bitcoin Game Theory Accelerates as US Rumored to Have Lost Its Lead in BTC Holdings

While the Republicans and President-elect Donald Trump are spearheading plans to launch a strategic bitcoin (BTC) reserve (SBR) in the US, rumors have started circulating that the US has lost its dominance in BTC holdings among countries.

Matthew Pines, Director at cybersecurity firm SentinelOne and National Security Fellow at the Bitcoin Policy Institute (BPI), a US-based think tank, posted today that the US is no longer the biggest BTC holder among countries.

"But this isn't public knowledge," he added, without elaborating further.

Meanwhile, these rumors have been corroborated by popular BTC account AMERICAN HODL and Steven Lubka, Head of Private Clients and Family Offices at BTC brokerage Swan Bitcoin, who claim their sources suggest that Dubai has already amassed at least a BTC 300,000 portfolio, with higher estimates by "credible sources" reaching BTC 400,000. At the time of writing, this portfolio would be worth $31–$42 billion.

Data from a crypto-asset investment product company, 21.co, shows that the US currently holds BTC 183,422 ($19.2 billion). The US government has seized at least BTC 215,000 since 2020, although parts of these holdings have been sold. However, BTC 94,643 were seized from the hackers of the Bitfinex crypto exchange and are estimated to be returned to the clients of this platform once all legal processes are completed.

Meanwhile, people close to Donald Trump are signaling that the likelihood of the US confirming its strategic BTC reserve is high. From Trump's son Eric to Bitcoin Magazine founder David Bailey, who advised Trump on Bitcoin matters during his presidential campaign this year, there are strong indications of this initiative moving forward.

"I think very strong, but let’s see," Bailey replied when asked about the likelihood of signing an executive order regarding the reserve in the first 100 days of Trump's presidency.

BPI has already published a draft of the executive order designating BTC as "a strategic reserve asset within the exchange stabilization fund." However, it was criticized by other Bitcoin advocates, who argued that the draft is "an absolute nightmare for anyone using Bitcoin as money and a huge disappointment for the future of BTC."

"Defining Bitcoin as a 'store-of-value asset' reinforces the ossification narrative (who needs to move a stonk several times in a day?), which may put developers at risk when prioritizing changes to BTC to make it more usable as money (think scaling, for example)," said BTC writer L0la L33tz, who focuses on privacy matters. Her view was challenged by other community members.

In either case, the race among countries to add bitcoin to their holdings is ongoing.

Recently, former German Finance Minister Christian Lindner criticized Chancellor Olaf Scholz for not including BTC in Germany’s financial strategy. Meanwhile, a member of the European Parliament, Sarah Knafo, urged halting plans by the European Central Bank to launch its CBDC (central bank digital currency) and advocated for creating a BTC reserve instead.

"If you are against the SBR, you prefer UAE, Qatar, Saudi Arabia, Oman, Bahrain, China, and Russia to have more Bitcoin than the U.S.," Pines said.

At the time of writing, BTC trades at around $104,000 and is up 155% in a year.