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China Secretly Selling Bitcoin? Analyst Warns Bitcoin Price Crash to $40K

Will Bitcoin Price Rise as Chinas Yuan Hits 2023 Lows Heres the Data.webp.webp

The post China Secretly Selling Bitcoin? Analyst Warns Bitcoin Price Crash to $40K appeared first on Coinpedia Fintech News

China is the second-largest holder of Bitcoin, after the United States. It holds no fewer than 194,000 BTC tokens. Unlike the US, China does not have a clear policy on how to handle its Bitcoin reserve. 

A shocking claim from crypto analyst Leviathan suggests that China may be quietly selling its massive BTC reserves. He even warns that this shadow liquidation strategy could drive Bitcoin prices down to $40K. Unbelievable? Read on!    

China’s BTC Stash Comes From Criminal Seizures, Not Investments 

China is one of the prominent economic superpowers, which has not yet developed a clear cryptocurrency policy. Still, it is illegal in the mainland of China to trade cryptocurrencies. 

China Bitcoin Holdings

However, China has a huge BTC reserve of 194,000 BTC tokens, worth approximately $416,415,936,620. It is the second-largest holder of BTC, after the United States, which holds as many as 207,189 BTC tokens, valued at over $17,531,966,455.   

The BTC tokens, seized by Chinese law enforcement agencies in connection with scams, money laundering and illegal gambling, make up the majority of Bitcoin tokens in the country’s reserve.

Why Local Governments Are Selling BTC Through Secret Channels 

How to handle seized BTC tokens is still a grey area in China due to the lack of clear policy or guidelines.

Leviathan alleges that local governments are exploiting this grey area and are selling confiscated Bitcoin abroad  on foreign exchanges as a hidden way to raise funds. 

Jiafenxiang: The Tech Firm Reportedly Behind Crypto Sales 

The crypto expert states that certain private technology companies like Jiafenxiang have helped local governments carry out this operation smoothly. 

The expert notes that using these companies, many local governments have converted their BTC tokens into Chinese yuan. 

Crypto Crimes in China Hit Record High in 2023

Reports indicate that the total number of crypto-related crimes in China has been consistently rising over the last few years. In 2023 alone, the country witnessed as many as 3,000 money laundering cases. In the same year, at least $59 billion was seized in crypto-related crimes. 

Many experts believe that it is high time to create a clear legal framework to handle seized crypto assets in China. 

Leviathan opines that some judges and legal experts want crypto to be recognised as legal property. 

If it is done, it can be better managed when confiscated.  

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  • Also Read :
  •   China Slapped with 245% Tariffs – Bitcoin Drops, Gold Hits Record High
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Hong Kong’s Role in China’s Potential Crypto Pivot 

Leviathan notes that some experts want China to move seized cryptos to Hong Kong. Hong Kong, which is situated outside the mainland of China, has a clear crypto regulation framework.

Will China Create a Sovereign Crypto Fund? 

Since the victory of pro-crypto candidate Donald Trump in the US presidential election, the US has changed its stance on the cryptocurrency sector. Since his induction, the Trump administration has introduced several pro-crypto policies, including the signing of an executive order to establish a Crypto Reserve. 

If the US continues with its aggressive crypto adoption policy, China may have to rethink how they handle the segment of digital assets.

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