Concerns are escalating over the sluggish pace of the UK’s economic growth, with recent figures indicating a deceleration.
To address potential fiscal deficits, some analysts are recommending the Treasury consider unconventional assets such as cryptocurrencies, particularly bitcoin (BTC-USD), to bolster its coffers.
Last week’s decision by the Bank of England to lower interest rates came with a muted economic forecast, predicting only a 0.75% GDP growth this year—down from the previously anticipated 1.5%.
Chancellor Rachel Reeves expressed dissatisfaction with this sluggish growth, emphasizing a commitment to revitalise the economy and alleviate the cost of living pressures.
She highlighted initiatives aimed at removing regulatory barriers and investing in infrastructure to stimulate economic progress and enhance household incomes.
Amidst these economic challenges, the UK’s national debt hovers around £2.8 trillion, matching its GDP and marking a significant increase from pre-2008 levels.
This surge in debt, exacerbated by the financial crash and the COVID pandemic, has led to discussions about the potential benefits of liquidating government-held bitcoin, acquired primarily through seizures related to money laundering investigations.
Estimates from Arkham, a data analytics firm, suggest the government possesses approximately 61,245 bitcoins, largely thanks to the capture of assets from international money launderer Jian Wen.
These assets, seized back in 2018 but only recognized as significant in 2021, now hold a value close to $4.8 billion.
Selling this stock could provide a substantial financial reprieve, especially given Bitcoin‘s recent price surge—more than doubling over the last year and hitting a peak of $109,000 in January.
While countries like Germany have begun liquidating their cryptocurrency assets, the UK remains cautious.
Recent comments from Labour peer Lord Livermore confirmed that the Treasury has no immediate plans to establish a strategic bitcoin reserve, contrasting sharply with more proactive stances seen internationally, such as former US President Donald Trump’s pro-crypto policies.
With bitcoin’s value near record highs, the UK faces a pivotal decision: sell now and capitalise on current market conditions, or wait and see if cryptocurrencies gain greater governmental relevance in the future.
