A Costly Mistake: Chancellor Of The Exchequer Plans To Dump UK’s Bitcoin Holdings

• The UK Government’s chief financial minister is reportedly preparing for the sale of her country’s over 61K Bitcoin holdings worth around £5 billion.
• This comes amid mounting pressure to fill the budget deficit ahead of the autumn Budget.

Rachel Jane Reeves, Chancellor of the Exchequer in the UK, could be on her way to making the worst decision in her term or possibly entire career. In a move that got the cryptocurrency community fuming, she reportedly eyes selling her country’s entire Bitcoin (BTC) holdings.

The UK’s Looming £5 Billion Bitcoin Sale

According to The Telegraph, Reeves is looking to use the proceeds of the sale to plug the “black hole” in the government’s coffers. The plan is to sell over £5 billion worth of Bitcoin to address the country’s budget deficit.

The official is currently coordinating with the Home Office and other concerned agencies to create a crypto storage system that will facilitate the offloading of the funds, including other cryptocurrencies seized from criminal activities. Based on Arkham Intelligence, the UK government maintains 61,245 BTC. As Bitcoin recovered to around $118,000, its holdings are equivalent to around $7.25 billion. Besides BTC, the platform doesn’t reflect any other crypto assets on the UK government’s wallet address.

ADVERTISEMENTUK Government’s Bitcoin Holdings (Source)The source claimed that the UK’s BTC cache was from asset seizures as far back as 2018. Almost all of it originated from a Chinese Ponzi scheme. Their value at the time of the raids was approximately £300 million.

Analysts stated that Reeves is under pressure to raise funds to finance the Labour Party’s spending plans ahead of the autumn Budget. Reports noted that the shortage could be roughly £20 billion.

Crypto Community Reacts

People were divided on the UK’s shocking move, with the crypto community generally not favoring the measure. Many called out Reeve for repeating the same mistake as Germany did last year when it sold its 49,858.88 BTC prematurely before the November rally.

ADVERTISEMENTThe German Government notably earned around $2.87 billion from the sale. However, advocates like Joana Cotar, member of the Bundestag, lamented the opportunity cost of the sale, considering Bitcoin’s soaring values in November. And that just gets worse as we look into what could have been as Bitcoin sailed to a new all-time high $123,091.61 per coin just last week.

Meanwhile, others expressed concern about the possibility of a crypto market crash if the UK dumps all its BTC assets within a very short interval.

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