UK Government’s Bitcoin Holdings Value Drops by $3.5B in 6 Months

Key Insights

• The UK government’s Bitcoin wallet is down $3.5B since last year, October 6.
• Large BTC holders suffered average daily realized losses of $337 million in the first quarter of 2026.
• The key support zone is $65K-$66K, and if Bitcoin loses it, a dump below $60K could happen soon.

Governments across the globe have been accumulating and mining Bitcoin (BTC) as the financial markets shift to decentralization. However, this decentralization has had a lot of hurdles, with even the United States still in its phase of passing the Strategic Bitcoin Reserve bill into a law.

Some of the countries holding large amounts of Bitcoin include the U.S., Bhutan, El Salvador, the United Kingdom (UK), and China, among others. The holdings of the UK have been at the center of discussion this week. Analysts are worried that Bitcoin can maintain its value over the long term after a massive short-term drop.

Bitcoin Holdings of UK Government Lose $3.5B in Valuation

The UK government holds 61.25K in Bitcoin, valued at $4.1 billion at press time. The amount was acquired through the strategic buying and seizing of illicit Bitcoin and has remained unchanged since early October 2025.

Last year in October, the UK government’s Bitcoin holdings were valued at $7.55 billion, a more than 45% decrease, equivalent to $3.46 billion. These figures showed the largest crypto had lost almost half of its valuation in slightly less than six months.

This incident was not an isolated case, as the value of BTC holdings by other nations also declined during this period. Some of these governments were selling a portion of their portfolios, raising questions about BTC’s futures. More selling could be coming since even Germany cashed out at $56K per Bitcoin and BTC jumped to over $120K in a few months.

Even though BTC’s price has stabilized better than other cryptos’, such a drop erodes confidence rather than building it.

Losses for Bitcoin Whales and Sharks in Q1 2026

In the first quarter (Q1) of 2026, large Bitcoin holders, in addition to governments, were also reporting losses, according to Glassnode. They suffered an average daily realized loss of about $337 million during this period. Their total losses in Q1 were more than $30 billion. It was the worst quarterly return for the large holders since 2022.

For instance, whale addresses holding between 1,000 and 10,000 BTC recorded daily losses of around $148 million. Sharks with tokens between 100 and 1,000 BTC lost $189 million daily, more than the whales. This meant sharks had acquired Bitcoin at a slightly higher price than whales.

This trend aligns with what has been happening to governments’ holdings over the past six months. The loss for the large holders was about 10 times that of the UK government.

Such a drawdown meant capitulation among large holders, which could be a hint of a potential price reversal. Crypto markets, just like all other financial markets, rebound after capitulation. Will such a rebound happen even this time around?

Key Support Levels to Watch Out for BTC

On the two-day chart, Bitcoin’s price briefly lost the $70K support level after reclaiming it, trading around $66K.

Interestingly, the price is holding above $66K, but breaking below this level would take BTC to $60K, a level that was tapped in early February. Other structural levels that could be revisited were at $55K and $52K, which would amplify the losses in holdings of the UK government, whales, and sharks.

Otherwise, BTC, supported by its current structure, could fuel a reclaim of $70K. Surpassing this level would mean BTC could hit $78K, $80K, or higher.

Altogether, the weak price action since early October, when markets saw the largest liquidation event of the year, contributed to this loss in holding value.

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