It is an interesting idea to consider holding confiscated Bitcoin as a way to have skin in the game or diversify without necessarily purchasing Bitcoin directly. Moreover, it could be seen as a way for the government to benefit from its success and widespread adoption.

The market has definitely demonstrated how quickly it can absorb large numbers of Bitcoins, and although the immediate impact can be unclear due to uncertainty about the origin of these assets, I think it's possible in future examples that taking strong ownership positions by holding rather than selling