According to a report from the Telegraph, the UK's Chancellor of the Exchequer, Rachel Reeves, may soon sell up to $7.1 billion in BTC to cover its budget deficit. Reports say that the Home Office is working with the police to liquidate the coins, which the country acquired through seizures.
Specifically, it plans to develop an official cryptocurrency storage system that would manage the sale of Bitcoin and other digital assets. Data from BitcoinTreasuries shows that the UK currently holds 61,245 BTC, making it the third country with the largest holdings, after the United States and China.
These coins primarily originated from a single raid in 2018, when the UK recovered 61,000 BTC from the proceeds of a Chinese Ponzi scheme, which had been stored in the country. A potential sale could trigger a significant drop in the price of Bitcoin, similar to what happened when Germany sold 50,000 BTC last year.
At that time, the price of Bitcoin fell from approximately $66,000 to $55,800 due to the magnitude of the sale. However, it may be different this time, considering the increased demand for the flagship cryptocurrency through corporate bonds and ETFs.
Interestingly, this development comes just as Binance founder Changpeng 'CZ' Zhao highlighted how Bitcoin could solve the national debt. In this case, the flagship cryptocurrency could offer a lifeline to the country. CZ made this statement in reference to how Bulgaria sold 213,500 BTC in 2018, coins that now account for nearly 80% of the country's national debt.
Meanwhile, the UK's decision coincides with the establishment of a Strategic Bitcoin Reserve by other countries, including the United States. In fact, Nigel Farage, leader of the Reform Party, has stated that the UK will set up a BTC reserve at the Bank of England if his party comes to power in the upcoming general elections.
Meanwhile, Farage has already urged the Labour Party to adopt Bitcoin from now on, something that the party has rejected. As the Telegraph noted, the country risks making a similar mistake to the sale of 401 tons of gold in 1999, which today would have been worth about $53 billion, enough to cover the current budget deficit.
The price of Bitcoin fell sharply to around $17,400 following the report that the UK is considering a sale. However, data from CoinMarketCap shows that BTC has recovered and is looking to regain the psychological level of $118,000.
