- The UK Government has switched parties for the first time in over a decade, with the Labour government taking control.
- The Government holds over AU $6b worth of Bitcoin, most of which were seized during a high-profile money laundering case.
- Some believe that the UK’s new Chancellor of the Exchequer, Rachel Reeves, may liquidate a large portion of the assets to help fund affordable housing and other economic upgrades.
- Meanwhile, Bitcoin has ignored the conjecture to post its monthly high.
For better or worse, the crypto sphere is in a place where governments and key authority figures can heavily influence it. On one hand, the newfound political importance is demonstrating the sector’s legitimacy to the world. However, it does leave the market vulnerable to the actions of one person or body, which may be concerning to some.
The community has rebounded from the events of late June, where a major sell-off from a German State Government caused the price of BTC to capitulate to its monthly low. We’ve seen first-hand how legislation can directly impact the market. And those following US politics will have noticed the power each ebb and flow can have over crypto’s short-term price movements.
With the United Kingdom changing government parties for the first time in 14 years, will Bitcoin and friends be affected?
Related: Sources: Trump May Declare Bitcoin A US Strategic Reserve At 2024 Nashville Conference
UK Government’s Bitcoins Could Be Used to Supplement Affordable Housing Plans
The UK Government reportedly owns approximately 61,425 BTC, which is worth over AU $6b. Like in Germany’s instance, most of these holdings were seized from a criminal investigation – this time, a major fraud case.
According to reports, the UK’s laws aren’t as strict on seized assets – so, the government could theoretically hold onto Bitcoin as an asset, unlike in Germany’s example. However, some are worried that switching from a Conservative to a Labour leader might cause another mass liquidation. This has become especially pertinent given the new PM’s mission of building affordable housing and boosting the economy.
Should We Be Concerned About Another Mass Sale of Bitcoin?
Politicians in the UK have been pretty quiet about their crypto stash, so the community is a little itchy about another mass liquidation. However, the coin has already brushed aside the supply shock and is racing back toward the US $70k (AU $104k) milestone anyway.
Related: Kraken Opens Institutional Services in Australia, UK Following US Launch
The UK releasing 61k Bitcoin back into the market would have some negative short-term effects on price – but we already know if other market conditions are okay, BTC will hit back regardless.
In fact, Cathie Wood and her company Ark Invest believe the furor over Mt. Gox repayments and Germany’s liquidation was a clear overreaction.
A report from the team’s asset manager stated:
Based on short-term-holder realized profits/losses and miner outflows, Bitcoin appears oversold…Current levels [of miner outflows] suggest that miners are capitulating, a harbinger of a bullish reversal.
Ark Invest
Source:
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