The UK should liquidate its Bitcoin trove valued at an estimated $5 billion, according to Bloomberg columnist Merryn Somerset Webb. Her advice was directed at the UK’s new Chancellor, Rachel Reeve, to help rebuild Britain’s economy.
The UK’s Bitcoin stash, largely accrued through criminal seizures, totals around 61,000 BTC. This includes approximately £1.4 billion ($1.78 billion) in Bitcoin confiscated from a Chinese fraud scheme.
Despite Prime Minister Keir Starmer’s manifesto lacking a clear crypto policy, questions arise regarding the new Labour-led administration’s stance on Bitcoin, which contrasts with the previous Conservative government’s push for crypto regulation under former PM Rishi Sunak.
Bitcoin Splits Governments into Two Sides
German authorities seized about 50,000 Bitcoin from the film piracy website Movie2k. The assets were officially obtained in January, though the seizure initially took place in 2013. Germany’s experience suggests that liquidating Bitcoin can take time.
Selling $5 billion in cryptocurrency could trigger market sell pressure and a price drop, as seen with Germany’s Bitcoin sale that led to an 18% retracement in Bitcoin price.
Alternatively, holding BTC as a reserve asset, similar to strategies by MicroStrategy and nations like El Salvador, could yield long-term benefits. El Salvador, under President Nayib Bukele, reported significant unrealized profits from its Bitcoin investments.
Bitcoin has entered a new paradigm in which investors must consider the future of state-controlled BTC stockpiles and sovereign approaches to holding or selling the asset.
