Britain plans to sell Bitcoin: is it the right move?

Britain plans to sell Bitcoin: is it the right move?

Britain is facing a controversial decision: the government is considering selling confiscated Bitcoin holdings to cover a growing budget deficit. The potential sale could include up to £5 billion (approximately $6.7 billion) in digital assets. Pressure is growing on the government as experts estimate a budget deficit of around £20 billion. In this context, the Ministry of Finance and the Ministry of Interior are working with law enforcement authorities to examine the details of a possible sale.

Currently, the UK holds around 61,245 BTC, which are collectively worth around $7.2 billion. Most of these Bitcoin were confiscated in 2024, when they were estimated to be worth around £1.4 billion. These BTC largely come from a 2018 seizure as part of a Chinese Ponzi scheme, which was originally valued at around £300 million. The Bitcoins are also linked to money laundering cases involving people like Jian Wen.

Critical reactions and concerns

The considerations for the sale have met with considerable criticism. Experts warn of the financial risks of a quick sale, looking back to the controversial gold sales that took place under former chancellor Gordon Brown in the early 2000s. These sales are often viewed as unwise decisions as they subsequently resulted in significant losses. Analysts recall that between 2014 and 2021, the US Marshals Service sold over 185,000 Bitcoins at auctions, resulting in an estimated loss of over $21 billion.

In addition, there are legal uncertainties regarding the reimbursement of funds to fraud victims, particularly those abroad or with unclear identities. Critics warn that selling these volatile assets like Bitcoin could potentially reduce future profits. Concerned voices include Zia Yusuf and Decentra Suze, who compared the sale to the strategy of liquidating gold holdings at the time.

Strategic considerations for holding Bitcoin

Despite these concerns, there are also considerations for holding Bitcoin as a strategic reserve. Some British politicians support this approach, pointing to the example of El Salvador, which appears to have made around $430 million in profits from its investments in Bitcoin. Given rising borrowing costs and slow economic growth, the government is exploring selling bitcoins as a possible alternative to tax increases or spending cuts.

Overall, the future of the seized Bitcoin holdings remains uncertain and will continue to be determined by public and political interest. The UK Treasury faces the challenge of managing financial constraints while balancing the potential risks of a sale. All eyes are on the coming decisions.