While Donald Trump pledges to make the US the “crypto capital of the world” the UK is slipping further behind with outdated Bitcoin regulations, writes Gautam Pillai
Rachel Reeves hasn’t minced words lately in her pursuit of economic growth. She wants to take the regulatory boot off the neck of British businesses and put the UK “at the forefront of digital asset innovation”.
Fine words, but they don’t match the reality. While Donald Trump pledges to make the US the “crypto capital of the world” the UK is slipping further behind.
Take just one example of this: Bitcoin treasury companies (BTCs). As Peel Hunt’s research today shows, a new class of publicly listed companies has emerged to provide investors with equity exposure to Bitcoin. These firms raise capital through equity markets to buy and hold Bitcoin. Bitcoin is no longer a fringe, speculative asset. More than 160 public companies have now adopted a Bitcoin treasury strategy, collectively holding around 950,000 coins – more than four per cent of Bitcoin’s circulating supply with a market value of over $110bn.
But the development of these BTCs is turning into another case study in how the UK risks losing ground to the US and its crypto bro President. The top firms in the US have a combined market value of $130bn, but the top 10 BTCs in the UK are paltry by comparison – less than one per cent of that size combined.
Why? The US environment is altogether friendlier. While the US has adopted modern standards that allow companies to reflect the real-time value of digital assets like Bitcoin, the UK is stuck with outdated risk-averse accounting rules that dampen transparency and discourage investors.
UK regime is punitive towards Bitcoin
Under our accounting rules, Bitcoin is still treated as an intangible asset. That means it is booked in the accounts at the cost of purchase, subject to impairment if the price falls – but the gains cannot be recognised unless the asset is sold. The economic reality is obscured. Investors must dig through footnotes to work out what the company is really worth. It is a regime totally unsuited to a liquid, publicly traded asset.
In the US, this changed in 2023 when regulators introduced fair value accounting for digital assets. Gains and losses now go through the income statement, giving investors a clear view and companies a fair shot at reflecting performance. This reform played a critical role in allowing companies like Strategy to become credible Bitcoin proxy stocks, with transparency and investor trust at the core. Strategy is now worth more than $100bn.
Meanwhile the UK is in the slow lane. The current treatment of Bitcoin discourages UK-listed companies from holding digital assets, even when it aligns with long-term strategy. It also creates asymmetry for investors. A rising Bitcoin price cannot be recognised, but a falling one must be recorded as a loss. That’s not prudent regulation, more punitive.
Companies like The Smarter Web Company (SWC) have already seen investor enthusiasm surge after disclosing Bitcoin treasury positions, despite the lack of accounting clarity. Imagine what could happen if UK firms were allowed to reflect fair value directly in earnings. What’s missing is the courage to move.
This is not a call for a deregulatory free-for-all. Holding Bitcoin in treasury requires robust governance, secure custody and clear disclosures. But none of that precludes updating the accounting standard, allowing more informed investors, attracting capital and sending a message that Britain still backs innovation against US markets stretching their lead. If the Chancellor is serious about loosening the heavy tread of the boot, she should start here.
Gautam Pillai is head of fintech research at Peel Hunt