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While Bitcoin (BTC) is trying to stabilize above the level of crucial support of $ 80,000, a new warning from market analyst Leviathan has raised concerns concerning an alleged strategy of China which could have a significant impact on the leading cryptocurrency.
In a recent job On X (formerly Twitter), Leviathan said that China was planning to sell its Bitcoin assets, which could reduce the price to $ 40,000. According to the analyst, this decision is only the start of a wider diagram.
Despite the Chinese government’s public position against the cryptocurrency trade, local authorities have found a bypass solution, he said. The expert says they discreetly cashed confiscated bitcoin, which led to an “underground tax strategy” which works in “legal ambiguity”.
Currently, the Chinese authorities would have around 194,000 BTC, which makes it the second largest government Bitcoin, just behind the United States.
The Leviathan stresses that if the Chinese government publicly denounces the cryptocurrency, it is simultaneously benefiting financially from its underground sales.
Local governments would have improvised their strategies, some private engaging technology companies to liquidate confiscated bitcoin on offshore exchanges. Others would have a more “clandestine” approach more.
The expert provides an example of a relatively unknown company in Shenzhen, Jiafenxiang, which would have facilitated more than $ 400 million Cryptography sales On behalf of various city governments, converting the product to Yuan and transferring funds to local financial services.
In 2023, China witnessed a record increase in crimes related to crypto, with more than $ 59 billion linked to illegal activities and more than 3,000 money laundering.
In the middle of this backdrop, local governments are increasingly dependent on income generated by Fines and confiscations – of which an important part comes from liquidated cryptocurrencies.
However, the need for funds are in contradiction with the government’s public anti-diligation position, forcing those responsible for unloading parts abroad through intermediaries while hoping for a minimum interference from Beijing.
There have been discussions between judges, lawyers and the police on the need for a coherent national policy concerning cryptocurrency. Some have proposed that the central bank takes control of these assets, while others have suggested establishing a sovereign cryptography fund.
Leviathan underlined Hong Kong, who, with his more favorable legal framework for cryptocurrencies, has become a potential destination for the Chinese bitcoin stock.
This situation presents a unique challenge for China, because the contradiction between its public denunciation of cryptocurrencies and its private benefit from them becomes more and more apparent.
While the United States is moving towards the legitimization of cryptocurrencies at the federal level, including discussions on Strategic reserves Under President Donald Trump and his continuous support for crypto, China can be forced to answer, says the expert.
In the end, Leviathan said that the fate of the 194,000 Bitcoin Holdings Chinese would not only shape national policies, but could also send undulations through the global financial landscape.
At the time of writing this document, BTC is negotiated at $ 84,800, recording an increase of 5% within the weekly time.
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