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The Bank of England recently forecast the UK GDP will grow by only 0.75% in 2025 – just half the 1.5% it had forecast in November. Could this lead to the government investing in bitcoin?
Bitcoin’s movements this year
2025 has already been a historic year for bitcoin. Donald Trump’s support for cryptocurrencies saw the Bitcoin price rise above $100,000 in January. Its price has since dipped slightly, reportedly due to two factors: Trump’s tariffs on goods from China, Canada, and Mexico, and the reluctance of his crypto task force to commit to establishing a Bitcoin reserve. Still, at the time of writing, Bitcoin has not dipped below $82k in March.
Yahoo Finance reported that “worries about the growth of the UK economy” were mounting and that one solution may be to sell Bitcoin to raise money.
UK finances
Chancellor Rachel Reeves said the interest rate cut is “welcome news” and would help ease the “cost of living pressures felt by families across the country” and make it easier for businesses to “borrow to grow”. She was “still not satisfied with the growth rate” and promised to “kickstart economic growth” and “put more money in working people’s pockets”.
The national debt stands at about £2.6 trillion, more than double the debt from the 1980s through to 2008’s recession.
UK’s Bitcoin
Yahoo reports that while it is not known how much Bitcoin the UK government owns, data analytics firm Arkham has suggested the government holds over 60,000 Bitcoin. This is “thought to be largely as a result of the seizure from international money launderer Jian Wen”.
The government has generally been quiet about Bitcoin, but the Labour peer Lord Spencer Livermore has said the treasury has “no plans to adopt a strategic Bitcoin reserve”.
How does this contrast with the US?
Donald Trump built his campaign last year partially in support of crypto. He promised to make the US the “crypto capital of the planet” and to establish a strategic Bitcoin reserve.
Trump’s crypto task force, led by crypto czar David Sacks, has not yet established that Bitcoin reserve. Sacks told CNBC that the task force was evaluating “the feasibility of a Bitcoin reserve” and that they “haven’t committed yet to doing it”.
The Securities and Exchange Commission
Trump’s administration, though, has affected Bitcoin in other ways. The New York Times recently reported on “one of the first concrete steps” in reducing crypto regulation. The Securities and Exchange Commission (SEC) was scaling back its special unit dedicated to crypto enforcement actions.
There were reportedly over 100 crypto-related actions during Joe Biden’s time in office. The SEC sued crypto companies, including Kraken and Coinbase for apparently breaking SEC rules, an allegation the companies denied. Reuters reported that they argued it was unclear when a crypto token would qualify as a security and therefore be subject to SEC oversight.
Trump nominated Paul Atkins, a lawyer known for advocating for reduced regulation, as the new SEC chair. According to Yahoo Finance senior reporter David Hollerith, the crypto industry views the appointments of Atkins and Sacks as “good signs”.
By March, there may be a Solana ETF, depending on the SEC’s decision.
Bitcoin demand in Japan
Bloomberg reported that Trump’s support for crypto was fueling Bitcoin demand in Japan. Shares of Metaplanet Inc. have gone up 4,800% over the last 12 months. Metaplanet, Bloomberg says, is planning to emulate the success of MicroStrategy (now simply Strategy with a ‘B’ in a logo reflecting its interest in Bitcoin).
Remixpoint Inc., also in Japan, announced its intention to buy “¥1.2 billion in Bitcoin last September, and has seen its stock grow over 300% since.”
The Japanese government’s Nippon Individual Savings Account (NISA) tax-free investment program was launched last year. It “encourage[s] citizens to invest their savings for long-term growth and retirement.” Bloomberg quoted a robotics student from Tokyo, Getto Hagiya, as saying, “I believe Bitcoin will be an indispensable asset in the future”. Hagiya had made his first investment in Metaplanet shares.
Direct Bitcoin purchases are subject to high taxes in Japan, so investing in Metaplanet shares is a cheaper alternative.
Could Bitcoin break $200,000?
In a recent article shared on Yahoo Finance, The Motley Fool’s Dominic Basulto reported that there “is no shortage of investment and financial firms predicting that Bitcoin will hit the $200,000 mark” this year.
Standard Chartered has predicted Bitcoin will rise to $200,000 by the end of 2025 and $500,000 before 2029.
Basulto says that Bitcoin’s growth will depend on how much new money flows into the currency this year. The more money, the stronger the money multiplier effect and the higher the price.
The money multiplier effect says that for every $1 of new money into Bitcoin, there can be a $2.50 to $6.73 market cap gain.
There is no guarantee of Bitcoin hitting $200,000 and Basulto says that the market “might be wildly overestimating” its growth this year.
Bitdeer’s Jeff LaBerge recently said on Roundtable, “I think we will be up this year… but a lot of things go into it.” Host Rob Nelson said, “Over the next year, while it may go up, down, up, down, it only ends up, up by the end of the year”.
Conclusion
While Bitcoin’s future remains uncertain, its growing influence on global economies is undeniable. The UK government has yet to signal any serious intent to invest in Bitcoin, in stark contrast to the pro-crypto stance emerging in the U.S. and Japan. With mounting national debt and sluggish economic growth, the question isn’t just whether the UK will invest in Bitcoin, but whether it can afford to ignore it.