Stack BTC, a Bitcoin company that Reform UK leader Nigel Farage has advertised, lost 15% of its asset value, prompting renewed warnings from finance experts about investing in Bitcoin, particularly in firms like Stack BTC.
According to reports, Farage invested £215,000 in the Bitcoin treasury company. Stack BTC’s structure is such that it buys the cryptocurrency on behalf of its shareholders, with the additional aim of purchasing other companies using the value it gains from holding Bitcoin. Contrary to expectations, Stack BTC’s investments have fallen 15.48% since its launch in March this year, a loss of £565,000.
In the meantime, the Liberal Democrats have called for a ban on MPs “flogging” specific financial services and products. According to a statement, the legislators advised people to be cautious about buying shares in “Farage,” saying that his stock is “only heading one way.”
In defence of the Reform UK leader, the party’s spokesperson said Farage did not have a brand ambassador role at Stack BTC but simply bought shares like any other regular investor. However, it is worth noting that Farage appeared in a promotional video earlier this year, spending £2 million of Stack BTC’s money on Bitcoin.
Further contradicting the Reform UK spokesperson’s position, it was recently reported that Farage received £270,000 for 12 hours’ work promoting Stack BTC. The payment allegedly came from the company’s largest shareholder, Paul Withers, who also owns gold dealer Direct Bullion.
Withers leads the Stack BTC shareholder ranking with 20.72% of the company’s shares, followed by Farage, who holds 5.61%. Only Withers and Farage own shares above the threshold to have voting rights. Former Conservative cabinet minister Kwasi Kwarteng is Stack BTC’s executive chair and owns 3.55% of its shares.
Farage’s interest in crypto has been the subject of scrutiny, particularly since his critics alleged he received an undisclosed £5 million gift from crypto billionaire Christopher Harborne. Following Stack BTC’s crash, Wealth Club’s Chief Investment Strategist Susannah Streeter said such a steep fall in value shows just how brutal such assets remain. According to her, companies that simply stack up bitcoin holdings have no diversification cushion to soften the blow when prices turn.
Renowned Bitcoin critic Peter Schiff criticized Farage for investing in the Bitcoin Treasury. Schiff said that politicians who promote such companies do so to get votes from people who own Bitcoin. Meanwhile, AJ Bell’s Head of Markets, Dan Coatsworth, said Stack BTC’s history of multiple name changes is a red flag investors would note.
