Bulgaria Missed $25B Debt Payoff by Selling Bitcoin in 2018
Bulgaria's 2018 sale of 213,500 BTC — now worth more than its public debt — has reignited debate over whether governments should treat crypto as a reserve asset. The Balkan country seized over 213,500 Bitcoin back in 2017 and sold them the following year; now, that would be more than enough to cover the country's public debt.
The government sold the Bitcoin soon after the seizure — but some speculate that despite official denial the government may still hold the assets. Now, the same amount of Bitcoin would be worth about $25.24 billion. This exceeds the country's public debt of $24 billion, according to World Economics data.
A History of Investment and Loss
In 2017, Bulgaria seized a significant amount of Bitcoin — around 213,519 BTC — worth approximately $3.5 billion. This haul was enough to cover a fifth of the country's national debt at the time. However, the government sold the Bitcoin soon after the seizure. Today, the same amount of Bitcoin would be worth about $25.24 billion.
This drastic change in value highlights the risks associated with treating crypto as a stable reserve asset. According to Alex Obchakevich, founder of Obchakevich Research, "Bitcoin's volatility makes it difficult to use it as a stable reserve."
Expert Analysis and Criticism
Robert Znidar, director at crypto asset management platform Iconomi, was more critical of the decision. According to him, the sale was motivated by "unfamiliarity of the philosophy, utility and mission of BTC." He added: "The potential benefits of holding on to Bitcoin would be overshadowed by the risks of a sharp drop in value."
Obchakevich also emphasized the importance of diversifying holdings. "Limiting the share of Bitcoin to about 10-15%, phased liquidation, hedging through derivatives, and a clear legal framework to avoid macroeconomic instability are necessary," he explained.
Not Everyone Convinced
Valentin Mihov, co-CEO at Web3 market maker Enflux and a Bulgarian, is not as convinced that his government made the right call. According to Mihov, the story "reflects how most governments still misunderstand what crypto can be: not just a speculative asset, but a strategic reserve opportunity."
Mihov noted that at the time, "most institutions still saw Bitcoin as radioactive, if they even knew about it," which played a significant role in the decision to sell. However, he added: "I would’ve argued for a partial liquidation. However, I would’ve argued for a long-term reserve structure."
"Even a 10 or 20% strategic hold would’ve positioned Bulgaria ahead of the curve," Mihov highlighted.
Other Governments Holding Bitcoin
According to a recent review, governments collectively hold about 463,000 BTC, about 2.3% of Bitcoin's total supply. The two top holders are the United States and China, with Bitcoin Treasurys data showing that they hold over 198,000 BTC and exactly 190,000 BTC, respectively.
The United Kingdom is third, holding 61,245 BTC, followed by Ukraine, which includes public officials' holdings, at 46,351 BTC. The fifth top holder is North Korea, which largely acquired Bitcoin through the activities of state-sponsored hacking groups, currently holding 13,562 BTC.
Bhutan is the sixth-largest holder of Bitcoin among countries, with its 10,486 BTC. The government often makes headlines with its Bitcoin transactions, with a July 14 report noting that it transferred $74 million in Bitcoin to Binance over two weeks.