Is China Selling Their Bitcoin: Strategy to Make Crypto Market Dump?
2025-04-20
A new wave of concern is sweeping across the crypto space, sparked by a bold claim from a prominent analyst. The accusation? That China, the second-largest Bitcoin holder after the U.S., is secretly offloading its massive BTC stash.
If this is true, the potential ripple effects could trigger a sharp drop in Bitcoin’s price—possibly dragging it down to $40,000. So, is China selling their Bitcoin? And what could this mean for the global crypto market?
China’s Hidden Hoard: 194,000 BTC and No Clear Policy
Despite having banned crypto trading on the mainland, China currently holds around 194,000 BTC, reportedly worth over $13.2 billion.
These digital assets weren’t bought but rather seized by authorities from criminal operations—ranging from money laundering and illegal gambling to scam rings.
In contrast, the U.S.—which is far more transparent with its crypto strategy—holds approximately 207,189 BTC worth more than $14.1 billion.
Unlike the U.S., China has no clear legal framework regarding what happens to confiscated crypto. This legal limbo is exactly what’s raising red flags.
Whispers of a Secret Sale Strategy
According to crypto analyst Leviathan (@TechLeviathan), some Chinese local governments may be taking matters into their own hands.
Faced with growing financial pressure, they’re allegedly liquidating Bitcoin through backdoor sales, partnering with third-party tech firms to sell seized BTC overseas—away from prying eyes.
One company, Jiafenxiang, a lesser-known Shenzhen-based firm, is reportedly facilitating these covert sales. The firm has allegedly already processed over $400 million in Bitcoin transactions on behalf of several local governments. And according to Leviathan, this is just the beginning.
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Why Would China Sell Bitcoin in Secret?
There are two big motivators behind these alleged actions:
- Financial Pressure on Local Governments
In 2023 alone, Chinese municipalities collected 378 billion yuan (around $52 billion) from fines and seizures. With public funding sources drying up, local governments are desperate for new cash flows. - No Unified Regulation
Each region is reportedly improvising how to handle confiscated crypto. Some are converting it into yuan via intermediaries, then funneling the funds into government budgets. This “gray area” has turned into an unofficial strategy, even though it walks a legal tightrope.
China Selling Bitcoin: Could It Trigger a Market Crash?
The crypto community is on edge. If China begins a full-scale sell-off of its 194,000 BTC, the market could face massive downward pressure.
Leviathan suggests that such actions could push Bitcoin (BTC) prices down to $40,000, especially if institutional investors interpret the moves as panic selling.
While there’s no official confirmation from the Chinese government, the lack of transparency and rising reports of Bitcoin sales point toward a potential silent dump strategy.
The Hong Kong Workaround
Interestingly, Hong Kong—which operates with a separate legal system—has emerged as a possible solution. The region has more structured crypto regulations and even allows ETFs for Bitcoin and Ethereum.
Some experts believe China may eventually shift its seized assets to Hong Kong, allowing for a more regulated and transparent liquidation process. This move could also shield the mainland from legal scrutiny and international backlash.
FAQ
Q1: How much Bitcoin does China currently hold?
China holds approximately 194,000 BTC, mostly from government seizures related to crypto-related crimes.
Q2: Is Bitcoin legal in China?
Trading Bitcoin is illegal in mainland China, but holding BTC is not explicitly banned. However, there’s no clear legal pathway for using or liquidating it.
Q3: Is China really selling its Bitcoin?
There is no official confirmation, but analysts like Leviathan claim that local governments are quietly liquidating Bitcoin through third-party firms.
Q4: How much Bitcoin has China allegedly sold?
According to reports, Chinese local governments may have already sold over $400 million worth of Bitcoin.
Q5: Could this affect Bitcoin’s price?
Yes. A massive sell-off from China could create downward pressure on BTC, with some analysts predicting a price drop to $40,000 if the trend continues.
Q6: Why is Hong Kong being mentioned?
Hong Kong has a more regulated crypto environment and could be used by Chinese authorities to sell BTC legally and transparently.
Disclaimer: The content of this article does not constitute financial or investment advice.
