Nigel Farage just ploughed £260,000 into the crypto company run by the former finance minister whose mini-budget has been blamed for plunging the UK economy into chaos.
The poll-leading Reform Party leader framed his investment in Kwasi Kwarteng’s Stack BTC, a Bitcoin treasury company, as his latest act of support for the UK’s crypto community.
“I have long been one of the UK’s few political advocates for Bitcoin, recognising the role digital currencies will play in the future of business and finance,” Farage said in a statement.
“London and the UK has (sic.) historically been the centre of [the] world’s financial markets, and I believe that we can and should be a major global hub for the crypto industry.”
Farage’s investment further underscores his ambition to replicate Donald Trump’s success in the 2024 presidential election, in which the US president secured his return to the White House with ample support from the crypto industry.
While the two right-wing populists have been seen as close in the past, their relationship seems to be cooling, as Trump decided not to meet Farage at Mar-a-Lago this weekend, the Financial Times reported on Monday.
Over the years, Farage has become a common fixture at industry events, and last year the Reform Party became the first UK party to accept cryptocurrency donations.
Kwarteng’s Bitcoin treasury
Kwarteng served as chancellor of the Exchequer for just over a month in 2022 and is best known for announcing a slew of policies aimed at boosting economic growth.
Instead, his mini-budget triggered a crisis in the UK gilt market, saw the value of the sterling crash and led to Kwarteng’s defenestration from then-Prime Minister Liz Truss’ government.
Truss was ousted from Number 10 just days after.
Since leaving government, Kwarteng has maintained a relatively low profile.
Yet he reemerged in November, announcing that he was backing Stack BTC.
“Crypto is not going to disappear — and given London’s importance and history as a financial centre it’s important that we play a part in this new industry,” he said at the time.
Stack BTC is part of a wave of some 200 companies that aim to replicate the success of Strategy, the software company-turned Bitcoin treasury, which has seen its stock surge by 280% since it began buying Bitcoin in 2022.
They had reason to be excited. The Trump presidency’s pro-crypto tilt seemed to herald an unprecedented Bitcoin rally. Over the last year, the price rose and rose.
As it did, companies banking the digital asset on their balance sheet could issue more shares to raise capital and buy even more Bitcoin.
Many also tapped low-interest debt to help them purchase the soaring asset.
Mounting pressure
Yet, these companies have come under pressure amid the crypto market contracting by almost 50% from its October record highs. Many have stopped buying Bitcoin and begun offloading their assets.
Those firms now hold Bitcoin worth about $76 billion, roughly half of their peak value, according to BitcoinTreasuries.net.
Strategy itself has seen its stock fall by almost 70% since its July highs.
Moreover, Goldman Sachs has named Saylor’s firm the most-shorted stock among companies with market caps over $25 billion.
By contrast, Stack BTC has seen its share price surge by 83% since the start of the year, according to Yahoo Finance.
