🌎 UK May Liquidate $5 Billion Bitcoin Stockpile Amid Economic Plans

Bitcoin has entered a new phase, requiring investors to consider the future of state-controlled BTC stockpiles and sovereign strategies for holding or selling the asset.

UK’s Bitcoin Holdings and Potential Liquidation

The United Kingdom should consider liquidating its Bitcoin (BTC) stockpile, valued at an estimated $5 billion based on current prices. This suggestion comes from Merryn Somerset Webb, a senior opinion columnist. Webb directed her advice at the UK’s new Chancellor, Rachel Reeve, amid discussions on how the Labour-led administration might gather funds to rejuvenate Britain’s economy.

Origins of Britain’s Bitcoin Stash

Britain’s Bitcoin accumulation has significantly increased over the years due to criminal seizures and other crackdowns on illegal activities. The government owns around 61,000 BTC, including approximately 1.4 billion pounds ($1.78 billion) in Bitcoin confiscated from a Chinese investment fraud scheme in January.

Since crypto was not mentioned in Prime Minister Keir Starmer’s manifesto, there are questions about how the new administration will handle BTC and cryptocurrencies following a recent landslide victory. The previous Conservative-led government, led by former PM Rishi Sunak, aimed to implement comprehensive crypto regulations and position Britain as a global Web3 innovation hub.

Possible Outcomes of Liquidating Bitcoin

If Britain decides to offload its significant Bitcoin holdings, it would be following the example of Germany. The German government previously liquidated its $3 billion in BTC over a three-week period. German authorities had seized about 50,000 Bitcoin from the film piracy website Movie2k. The seizure initially took place in 2013, and German Police officially obtained the assets in mid-January. If Germany’s experience serves as a model, Britain’s potential BTC sale may not happen immediately.

Liquidating $5 billion in cryptocurrency could lead to selling pressure and a price decline. When Germany sold parts of its Bitcoin, BTC retraced approximately 18%, and markets experienced short-term bearish sentiment.

Alternative Strategy: Holding Bitcoin

Alternatively, the UK could choose to hold BTC, wait for higher prices, and potentially acquire more as a reserve asset. Entities like MicroStrategy and its founder, Michael Saylor, have praised crypto as a superior inflation hedge. Sovereign nations like El Salvador, under President Nayib Bukele, have also endorsed BTC investments, reportedly achieving millions of dollars in unrealized profits.