China, once a major bitcoin, ethereum and cryptocurrency player, could still be holding around $6 billion worth of cryptocurrencies after seizing them in 2019.
The cryptocurrency China is rumored to be holding came from the seizure of bitcoin, etheruem and other coins related to the 2019, $6 billion PlusToken Ponzi scheme—with some now warning of a crypto price crash if China were to suddenly offload the coins.
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“[The] government of China is a crypto whale,” Ki Young Ju, the chief executive of blockchain data analytics company Cyptoquant, posted to Twitter. “Chinese authorities seized 194,000 bitcoin, 833,000 ethereum and others from the PlusToken scam in 2019. They forfeited these $6 billion-worth assets to the national treasury.”
If China does still hold the bitcoin and ethereum it seized, the country would rank among the world’s largest crypto whales, dwarfing the likes of Microstrategy and Coinbase.
“Sell-side liquidity from miners, institutional investors, and retail investors is almost nothing if you compare governments,” Ki Young Ju said via Twitter DM, adding in a separate Twitter post the government of Bulgaria may be holding more than 200,000 bitcoins.
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“Bitcoin dropped from $30,000 to $17,000 because of luna sell-side liquidity,” Ki Young Ju said, pointing to the collapse of the terra luna algorithmic stablecoin ecosystem that included the Luna Foundation Guard’s hoard of bitcoin designed to support the cryptocurrencies. “That was around 80,000 bitcoin, so it’s basically twice [the terra luna collapse].”
“It could be crazy,” Ki Young Ju said when asked what the effect of China selling the coins could be. “Imagine they start dumping 194,000 bitcoin to kill crypto markets.”
However, some think China could have already offloaded the coins, pointing to reports from local journalists and crypto investors that suggest China may have worked with an exchange such as Huobi to sell off the crypto.