According to a recent report by The Telegraph, U.K. Chancellor Rachel Reeves is considering selling off roughly $5 billion worth of confiscated Bitcoin in order to alleviate the government's budget strain.
The government is currently designing a new framework for securely holding and liquidating seized crypto.
The U.K. boasts the third-largest Bitcoin stockpile among countries that own the leading cryptocurrency. At press time, it holds a total of 61,000 coins.
The country's biggest seizure was linked to a massive Chinese Ponzi scheme. Jian Wen, who was employed as a takeaway restaurant assistant in London, was convicted of money laundering. After raiding her properties, the U.K. authorities discovered tens of thousands of Bitcoins.
Offloading the government's vast Bitcoin holdings could partially help with a $20 billion gap in the U.K.'s national budget.
As reported by U.Today, the leading cryptocurrency recently reached a new all-time high of $122,838, according to CoinGecko data.
Bad timing?
Last year, the German state of Saxony went on a massive selling spree, liquidating a total of $2.9 billion worth of confiscated cons between June and July. In hindsight, the move was harshly criticized by members of the cryptocurrency community since it missed out on billions of dollars worth of profits due to Bitcoin's price appreciation.
There are similar concerns that selling Bitcoin could be a mistake now for the U.K.
Former U.K. Chancellor Gordon Brown famously sold half of the country's gold reserves when the yellow metal was trading at extremely low prices (roughly $275 per ounce).
Given that many analysts expect Bitcoin to surge higher this year, a potentially massive sale could also end up being short-sighted in the long term.
Vladislav Sopov
U.Today Editorial Team