The need to include Bitcoin in strategic government reserves now seems inevitable. This is particularly true when considering Bulgaria’s sale of 213,500 BTC in 2018, which would be enough to wipe out its public debt entirely.
When Bulgaria sold 213,519 BTC for $3.1 billion
The strong upward trend in Bitcoin since its creation has the ability to impose painful balance sheets on those who have failed to resist the call to sell. This is why the question of whether to hold on to BTC is now being asked even in the hushed corridors of government.
The promise of these government funds in BTC regularly revives memories of less glorious resale operations in the field, particularly in light of Bitcoin’s recent historic high, now standing at over $122,800. Suffice it to say that Bulgaria appears to be a mistake that should not be repeated.
At the end of 2017, this Balkan country had a portfolio of 213,519 BTC seized in legal proceedings. At that time, Bitcoin had just reached an all-time high of nearly $20,000, without however crossing that symbolic threshold. This was an opportunity for the Bulgarian government to sell all of its holdings for a total estimated at just over $3.1 billion.
A move that would now enable it to repay its public debt
A great move, given the price of Bitcoin at the time. But a calculation that quickly becomes more problematic when you consider that it would have raised more than $25 billion today. That’s more than its public debt, estimated at $24 billion on the World Economic Forum website.
Easy to say, some might argue. But, as the founder of Obchakevich Research explains, it seems imperative to revisit the regulatory environment of the time, when Bitcoin was still widely regarded as a highly speculative scam with no future. This was especially true given that it had been seized by the courts.
According to this expert, this story “reflects how most governments still misunderstand what crypto can be: not just a speculative asset, but an opportunity for strategic reserves.” Bulgaria could have sold some of its BTC to diversify its portfolio while keeping the funds over time. This lesson should serve as an example to motivate governments holding seized BTC not to rush to sell everything. The United States and China top the list, with estimated portfolios of $24.5 billion (207,189 BTC) and $23 billion (194,000 BTC), respectively. In other words, it will take a little more than that to wipe out the US’s abysmal debt, which now stands at over $36 trillion.
