UK advised to ‘rebuild Britain’ with $5b Bitcoin trove

Bitcoin has entered a new paradigm where investors must consider the future of state-controlled BTC stocks and dominant approaches to holding or selling the asset.

Bloomberg senior columnist Merryn Somerset Webb wrote on Friday that the UK should liquidate its Bitcoin (BTC) treasury, worth an estimated $5 billion at current prices. Webb’s advice was directed at the UK’s new Chancellor of the Exchequer, Rachel Reeve, as commentators weighed in on how the Labour-led administration could fund rebuilding the British economy.

Britain’s bitcoin holdings have grown significantly over the years due to criminal seizures and other crackdowns on illegal operations. The government has about 61,000 BTC, including about 1.4 billion pounds ($1.78 billion) of bitcoin seized from a Chinese investment fraud scheme in January.

With no crypto in Prime Minister Keir Starmer’s manifesto, questions remain over how the new administration will treat BTC and cryptocurrencies following its landslide victory earlier this month. The previous Conservative-led regime, led by former Prime Minister Rishi Sunak, sought to impose sweeping crypto regulations and transform Britain into a global Web3 innovation hub.

Bitcoin divides governments

If Britain decides to dump its massive Bitcoin holdings, the country would effectively be following in Germany’s footsteps. According to Crypto.news , the German government dumped $3 billion worth of BTC in a three-week selling spree.

German authorities previously seized around 50,000 Bitcoins from the movie piracy site Movie2k. The seizure first occurred in 2013, with German police officially seizing the assets in mid-January. If Germany’s case is any indication, the UK’s potential BTC sale could be a distant future.

However, liquidating $5 billion worth of crypto will likely lead to selling pressure and a price drop. Indeed, BTC pulled back nearly 18% when Germany sold off pieces of the asset, and markets collapsed under a short-term bearish bias.

The alternative path is to hold BTC, wait for higher prices, and perhaps even acquire more as a reserve asset. Organizations 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 backed BTC investments, reportedly making millions of dollars in unrealized profits.