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According to claims made by crypto expert Leviathan, Chinese authorities reportedly hold around 194,000 Bitcoin 
$94,587 accumulated from judicial cases. This situation could significantly impact the market, potentially driving Bitcoin prices down. Following the United States, China ranks as the second largest holder of Bitcoin.
China’s Sales Method
Despite the ban on crypto trading in mainland China, it is alleged that local governments have been quietly selling confiscated Bitcoin through third-party intermediaries. Claims suggest that the revenue generated from these sales has reached approximately $400 million. According to Leviathan, local authorities convert the proceeds from these sales into yuan and allocate them to city budgets.
Bitcoin May Plummet
The methods employed by authorities are described as temporary and pragmatic measures that do not align with official regulations. Legal experts indicate that these practices may violate China’s ban on cryptocurrencies. Local officials are developing their own solutions due to a lack of national regulations and financial pressures.
Leviathan’s statements predict that if this process continues or accelerates, Bitcoin could see a decline toward $40,000. The year 2023 has been historically significant for crypto-related crimes in China. Nevertheless, authorities have started crypto regulation efforts through the autonomous region of Hong Kong, without establishing a coherent national policy in subsequent seminars.
It is claimed that Jiafenxiang, a local company based in Schengen, has processed over $400 million in cryptocurrency sales on behalf of city administrations. This situation contributes to rising risk factors in the market due to a lack of transparency and regulation. Regulators have also emphasized the need for oversight of third-party brokerage transactions.
Leviathan states, “China’s Bitcoin sales could exert negative pressure on prices.”
However, despite these massive sales, it seems illogical for BTC to experience such significant drops in an environment of increasing liquidity and institutional acceptance. Moreover, the U.S. announcement not to sell its vast Bitcoin reserves has alleviated significant supply pressure on the markets.
These developments in the market have heightened calls for the establishment of relevant regulations. There is a need for authorities to control the sales activities of third-party companies and implement monitoring mechanisms. Overall, uncertainties surround the sustainability of these sales activities and their impact on market dynamics.
