Rachel Reeves, the UK’s new Chancellor of the Exchequer, is facing one of the worst economic times since World War II. Her goal of “rebuilding Britain and improving the situation in every part of our country” requires significant funding. But where to get the money fast? Some are eyeing the 60,000 BTC the UK has in its coffers.

In January of this year, the English authorities seized 60,000 BTC from a citizen of Chinese origin.The collection would have been done through a pyramid scheme. Now, as a solution to the economic problems that the country is going through, journalist Merryn Somerset Webb recommends selling these BTC.

At the current price, we are talking about around 5 billion dollars. However, it should be noted that at the judicial level, the government does not yet legally possess these bitcoins. Although they are in the hands of the authorities, a process must be carried out to prove the illegality of these BTC , since, at the time of the seizure, the Chinese citizen could not explain their origin. 

Somerset says that selling these BTCs on the current market would allow the Finance Minister to have quick liquidity , without the need to make fiscal adjustments that could compromise the already disrupted English economy.  

The journalist also states that, for her, “Bitcoin is not an established currency or a consolidated asset class,” commenting that there is little chance that Bitcoin will become part of central bank reserves. However, let us remember that institutional adoption of digital currency is increasingly advancing, with ETFs being the main vehicle. 

The mistake of selling gold

While Somerset suggests selling bitcoins, he cites reference to what happened with former Prime Minister Gordon Brown and the sale of the UK's gold reserves between 1999 and 2002, an operation considered to be among the worst in the history of the markets. Brown decided to sell 401 tonnes of gold (of the 715 he held in his reserves) at a price of $275 per ounce.  

The justification behind this decision is that the price of gold had been falling steadily over the past decade, suggesting that it seemed like a sensible decision. However, the price has since stopped falling, even recently hitting an all-time high of over $2,480 per ounce. So this scenario of selling BTC and seeing the price rise is quite likely to repeat itself. 

Finally, while Somerset argues for selling as a form of immediate financing, he notes that one should be cautious about selling, citing the case of Germany, where a massive sale of 50,000 BTC brought the price of the asset crashing. However, the price recovery was quite rapid , with Bitcoin having already recovered its price in less than a week.

Another important point in the comparison between the United Kingdom and Germany is that there are opposing suggestions. While in the United Kingdom it is recommended to sell, in Germany a member of the Bundestag, Joana Cotar, asked to stop the sale of BTC, since for her, it was better to hold them or keep them in state reserves for the long term.