Coinbase COIN CEO Brian Armstrong has emerged as a prominent figure in the ongoing debate surrounding the U.S. government's handling of its Bitcoin BTC/USD holdings. His strong stance against the potential sale of these holdings has sparked significant discussions within the cryptocurrency community.

"Coinbase's Armstrong Urges Against US Govt Bitcoin Sell-Off"

Debate Intensifies After Bitcoin Transfers

On Tuesday, Coinbase COIN CEO Brian Armstrong voiced his vehement opposition to the U.S. government selling its Bitcoin holdings. This came in the wake of a significant event where 19,800 bitcoin, valued at $1.9 billion, was transferred to a Coinbase Prime deposit address on December 2. The debate surrounding this transfer has intensified, with various experts and industry players weighing in.Jason Lowery, a U.S. Space Force major and author of Softwar, tweeted that this is a "huge strategic mistake." He emphasized that there is no price at which it makes sense for the U.S. to sell any Bitcoin it holds. Armstrong echoed Lowery's sentiment, stating, "Agreed – the U.S. government should never sell Bitcoin IMO."

Strategic Concerns Over Bitcoin Sales

Lowery argued that the government lacks an understanding of Bitcoin's strategic value. He drew parallels to past shortsighted policies and warned that the U.S. may later attempt to reclaim Bitcoin sold off due to its ignorance of its importance. Referencing Executive Order 6102, a 1933 directive that forbade hoarding gold, Lowery suggested that future policies might aim to reacquire Bitcoin in a similar fashion.Crypto educator Toby Cunningham labeled the potential sale as "dumb," asserting that the supply would be instantly absorbed by the market. Meanwhile, Tether USDT/USD strategy adviser Gabor Gurbacs speculated that the transfers could be routine custody updates rather than sales. He noted, "There is also a lot we don't know. It's not guaranteed they will sell. I haven't seen any official auction information yet."

Mixed Signals and Market Implications

While the government has moved 25,999 bitcoin worth approximately $2.49 billion to Coinbase this year, analytics platforms suggest that not all these transfers are intended for sale. Spot On Chain indicated that some movements could involve consolidating wallets or upgrading security for older addresses. CryptoQuant's head of research, Julio Moreno, noted that it was "highly likely" only 10,000 bitcoin were sold in the latest transactions, with the remaining 9,800 BTC transferred to a newly created wallet.Currently, the U.S. government holds approximately 183,850 BTC valued at $17.7 billion across various addresses. Armstrong emphasized, "The U.S. should recognize the significance of this technology before making irreversible mistakes."