Bitcoin could face significant selling pressure in the coming weeks following reports that the United Kingdom (U.K.) is considering the sale of $7.1 billion worth of BTC. The country intends to use the proceeds to help ease government operations.
U.K. Eyes $7.1 Bitcoin Sale To Plug Black Hole
According to a Telegraph report, the U.K. Chancellor, Rachel Reeves, could soon sell up to $7.1 billion worth of BTC as she seeks to fill her budget deficit. The Home Office is reportedly working with police forces to sell off the coins, which the country acquired through seizures.
Specifically, it plans to develop an official crypto storage system that would handle the sale of Bitcoin and other digital assets. BitcoinTreasuries’ data shows that the U.K. currently holds 61,245 BTC, making it the country with the third-largest holdings, behind the United States and China.
These coins primarily originated from a single raid in 2018, when the U.K. recovered 61,000 BTC from the proceeds of a Chinese Ponzi scheme, which had been stored in the country. A potential sale could cause the Bitcoin price to decline significantly, similar to what happened when Germany sold 50,000 BTC last year.
Back then, the Bitcoin price dropped from around $66,000 to $55,800, due to the magnitude of the sale. However, there is a possibility that this time could be different, considering the greater demand for the flagship crypto through corporate treasuries and ETFs.
Interestingly, this development comes just as Binance founder Changpeng “CZ” Zhao highlighted how Bitcoin could solve national debt. In this case, the flagship crypto could offer the country a bailout. CZ had made his statement in reference to how Bulgaria had sold 213,500 BTC back in 2018, with these coins now worth nearly 80% of the country’s national debt.
A Strategic Reserve Instead?
Meanwhile, the U.K.’s move comes at a time when some other countries, including the U.S., are moving to create a Strategic Bitcoin Reserve. In fact, Nigel Farage, the leader of the Reform Party, has stated that the U.K. will establish a BTC reserve at the Bank of England if his party comes to power at the next general election.
Meanwhile, Farage has already called on the Labour Party to adopt Bitcoin from now, which the party has rejected. As the Telegraph noted, the country risks making a similar mistake to when it sold 401 tonnes of gold in 1999, which would have been worth around $53 billion now, enough even to cover the current budget deficit.
The Bitcoin price sharply dropped to around $17,400 following the report that the U.K. is considering selling. However, CoinMarketCap data shows that BTC has bounced back and is looking to reclaim the psychological $118,000 level.
Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across several niches. His speed and alacrity in covering breaking updates are second to none. He has a knack for simplifying the most technical concepts and making them easy for crypto newbies to understand.
Boluwatife is also a lawyer, who holds a law degree from the University of Ibadan. He also holds a certification in Digital Marketing.
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