The UK plans to sell 5 billion pounds worth of Bitcoin to fill the deficit: short-sighted decision or necessary action?

The UK government is planning to sell approximately £5 billion ($6.7 billion) worth of seized Bitcoin, a move proposed by Chancellor of the Exchequer Rachel Reeves, aimed at filling a budget deficit of up to £20 billion.

It is reported that this batch of Bitcoin mainly comes from the confiscated assets related to the Ponzi scheme case in China in 2018, which was valued at only £300 million at the time. Now, due to the surge in Bitcoin prices, its value has increased nearly 20 times.

However, this plan has also sparked intense controversy. Supporters argue that selling Bitcoin could quickly alleviate financial pressure and avoid less popular measures such as tax increases or cuts to public spending. But critics warn that this move could repeat the mistakes of the UK government’s low-priced sale of gold reserves in 1999, missing out on greater future gains. Former Chancellor of the Exchequer Gordon Brown faced backlash for selling gold too early, costing the UK billions of pounds, and the volatility of Bitcoin could lead to similar mistakes being repeated.

In addition, legal barriers remain a key challenge. Some Bitcoin may need to be returned to victims of fraud, especially overseas victims, which complicates the liquidation process. The UK government is currently inclined to establish a framework for the custody and disposal of crypto assets to systematically manage and sell these assets in batches, rather than dumping them all at once.

At the same time, countries around the world have diverging attitudes towards government holdings of Bitcoin. El Salvador insists on a holding strategy, with its Bitcoin investments yielding more than $456 million, achieving a return rate of 153%. Meanwhile, Germany recently dumped nearly 50,000 Bitcoins, which caused short-term market fluctuations but was ultimately absorbed by the market.

If the UK ultimately decides to sell, its impact may go far beyond the financial level. This is not only about short-term budget balance but also involves whether the country should hold digital assets as strategic reserves in the long term.

Against the backdrop of the varied attitudes of governments around the world towards holding Bitcoin, the choice of the UK is not only related to short-term fiscal balance but may also serve as an important reference for the future policies of other countries.

As the importance of Bitcoin in the financial system becomes increasingly prominent, finding a balance between short-term interests and long-term strategies will be an important issue faced by governments around the world.

#英国比特币抛售 # fiscal deficit #cryptocurrency policy