Bitcoin Faces Selling Pressure as UK Plans to Offload Seized $7.1B BTC

TLDR

Table of Contents

The U.K. holds 61,245 BTC seized in 2018, now worth over $7.1 billion.
The U.K. may sell Bitcoin to reduce a £20 billion budget deficit.
Bitcoin dropped to $17,400 after reports of the potential U.K. BTC sale.
Germany’s 50,000 BTC sale in 2024 caused Bitcoin to fall from $66,000 to $55,800.

The price of Bitcoin may face pressure as the U.K. government considers selling around $7.1 billion worth of seized BTC. Reports indicate the country may offload these digital assets to help close a growing fiscal gap.

The proposal follows news that the U.K. holds approximately 61,245 Bitcoin, most of which were confiscated in a 2018 investigation. The potential move has drawn comparisons to past state-level sell-offs that caused steep market declines.

U.K. Planning a Sale to Address Fiscal Shortfall

According to recent reports from The Telegraph and other media, Chancellor Rachel Reeves is evaluating the sale of Bitcoin recovered during law enforcement operations. These coins were obtained following a major criminal investigation into a Chinese-led Ponzi scheme. The U.K. government has been holding Bitcoin since 2018.

Officials are now considering selling the crypto to help reduce a growing budget deficit, which currently stands at approximately £20 billion. The government has not confirmed a date, but sources suggest that the Home Office and police forces are preparing the necessary framework to store and liquidate seized digital assets securely.

The government intends to create a “cryptoasset holding and realization framework.” This system would ensure proper handling of digital currencies by law enforcement and the Treasury. A portion of the proceeds from any sale would go back to the police and government programs under existing asset-sharing rules.

Market Reaction and BTC Price Movement

Bitcoin saw a rapid drop to $17,400 following reports of the planned sale. However, market data shows that the price has since rebounded and is now trading above $118,000. The initial fall reflects market concerns about large-scale liquidations, which have previously triggered volatility.

In 2024, Germany sold around 50,000 BTC, which led to a noticeable drop in Bitcoin’s price. Investors fear a similar outcome if the U.K. proceeds with a sale of its entire holding. Traders are closely watching government announcements, as any confirmation of a sale could affect trading activity.

Bitcoin’s recent growth has been driven by ETF inflows, institutional demand, and broader adoption. Yet, a government liquidation of this size could cause temporary price shifts, especially if the assets are sold quickly or through public auctions.

Political Debate and Strategic Crypto Plans

The debate around the U.K.’s Bitcoin holdings has also sparked political disagreement. Nigel Farage, leader of the Reform Party, has proposed keeping Bitcoin as part of a national reserve. He has urged the Bank of England to hold BTC as a long-term store of value, should his party win the next election.

Farage said in May, “The U.K. must adopt Bitcoin to strengthen our financial position and reduce reliance on traditional banking systems.” However, the current Labour government has rejected that view. Chancellor Reeves has prioritized using the crypto proceeds to ease tax pressures and fund public services.

The decision to sell or hold the Bitcoin remains with law enforcement, not the Treasury. If courts determine that crime victims cannot be compensated or traced, then the government may proceed with liquidation. Legal reviews are still ongoing in relation to the 2018 case.

The Home Office continues to work on new systems for managing digital asset seizures. With the value of digital currency holdings increasing, officials believe stronger protocols are now needed to manage seized crypto securely and transparently.

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