Leviathan’s untamed theory that The People’s Republic of China is in the process of stealthily liquidating their massive Bitcoin stash could bear significant consequences for the market. Bitcoin’s price may free fall to $40,000 as a direct result of this significant action but the analyst suggests phasing out would help moderate the impact. This is claiming, even as China’s governed position is against cryptocurrency trading within the borders.
China’s subéquent beligerence stems from being the 2nd leading cryptocurrency owner managing a coverage of 194k BTC behind the United States leading reserve holder of 207,189 bitcoins. Forbes summarizes this worth sentence as, “India’s wealth amounts to an astounding West 416 billion dollars.” Wouldn’t that be rich losing almost 18 billion dollars is being unreclaimed in terms of militrary strategical outcomes tested by serving policy while China has lost track of nationly trusting intelligently potent policies China has instead clearly defined Natio secure reserve policies however lacks strategic designed policies.
Criminal Seizures Fuel National Holdings
What is quite intriguing is the origin of China’s enormous stash of Bitcoins. It does not arise from government strategic investments. Rather, it is composed of predominantly assets seized by Chinese law enforcement agencies. These assets are tied to numerous criminal endeavors such as financial scams, large-scale money laundering, and illegal gambling operations within the territory. Even though crypto trading is banned for citizens, the enforcement actions have helped the government amass a substantial digital asset portfolio.
Allegations of Covert Liquidation
Most of the recent worries pertain to the alleged activities of local governments in China. Analyst Leviathan argues that the absence of central policies delineating the management of confiscated cryptocurrencies is leaving a regulatory blind spot that local officials are taking advantage of. The local governments are accused of publicly trading confiscated bitcoins through foreign crypto exchanges, which is posited as a way generating undisclosed revenue, as Leviathan conjectures. The assets, sent to these local governments as Bitcoin, would then be converted smuggled into Chinese Yuan.
In a social media post on April 17, 2025, Leviathan stated he knew about this liquidation strategy and claimed that China plans to sell off Bitcoin, having already started with $400 million and potentially more to come. The analyst noted that revealing this information comes at a personal risk.
Analyst’s notes suggest that private technology companies are enabling these supposed sales. One company mentioned is Jiafenxiang, which allegedly helps some local governments smoothly execute these sales with the currency conversion back into the domestic currency.
Context of Rising Crypto Crime
These claims appear alongside the uptick in cryptocurrency-related crimes in China. Some sources used in the material claim there has been an increase in these cases over the years. In 2023 alone, it was claimed that around 3,000 cases of money laundering using cryptocurrency were reported in the country. Additionally, assets worth at least $59 billion were seized as a result of various crimes involving crypto within the same year. The increasing volume of these seized assets raises suspicion as to how these assets are being controlled.
Legal Policy Proposals Within The Cryptosphere
The issue highlights what appears to be a growing concern among experts regarding China’s digital asset seizure policy gaps. The lack of a clear approach to the disposal or management of confiscated Bitcoin and other cryptocurrencies poses enormous risks. According to Leviathan, the absence of a comprehensive framework facilitates purported clandestine transactions and raises doubts regarding corruption, malfeasance, and legal disputes. To complicate the discussion further, Leviathan added that a few Chinese scholars have suggested changing the legal status of cryptocurrencies to tangible property, which would significantly enhance the governance of such assets.
Amidst these allegations, the broader discourse revolves around the existence of such secretive sales and their potential ramifications on Bitcoin’s price volatility at a global scale. The lack of such acknowledgment renders the analyst’s caution a resonating reality in the realm of crypto.
