Bitcoin In Peril? Expert Warns Of China’s Alleged Scheme To Crash BTC To $40,000

As Bitcoin (BTC) makes an attempt to stabilize above the essential $80,000 assist degree, a brand new warning from market analyst Leviathan has raised issues about an alleged technique by China that might considerably affect the main cryptocurrency. 

China’s ‘Secret’ Bitcoin Technique

In a latest post on X (previously Twitter), Leviathan claimed that China plans to dump its Bitcoin holdings, probably driving the value right down to $40,000. In keeping with the analyst, this transfer is just the start of a broader scheme.

Regardless of the Chinese language authorities’s public stance towards cryptocurrency buying and selling, native authorities have discovered a workaround, he alleges. The skilled asserts that they’ve been quietly cashing in on confiscated Bitcoin, which has led to an “underground fiscal technique” that operates in “authorized ambiguity.”

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Presently, Chinese language authorities are reported to carry roughly 194,000 BTC, making them the second-largest government holder of Bitcoin, simply behind the US. 

Leviathan highlights that whereas the Chinese language authorities publicly denounces cryptocurrency, it concurrently advantages financially from its underground gross sales. 

Native governments are reportedly improvising their methods, with some partaking personal tech corporations to liquidate the confiscated Bitcoin on offshore exchanges. Others, allegedly keep a extra “clandestine method.” 

The skilled offers an instance of a comparatively unknown firm in Shenzhen, Jiafenxiang, that has allegedly facilitated over $400 million in crypto sales on behalf of varied metropolis governments, changing the proceeds into yuan and transferring the funds again to native finance departments.

Hong Kong Emerges As Potential Haven For China’s Confiscated BTC

In 2023, China witnessed a document surge in crypto-related crimes, with over $59 billion tied to unlawful actions and greater than 3,000 cash laundering circumstances prosecuted. 

Amidst this backdrop, native governments are more and more reliant on the income generated from fines and confiscations — a good portion of which comes from liquidated cryptocurrencies. 

Nonetheless, the necessity for funds is at odds with the federal government’s public anti-crypto stance, forcing officers to dump cash overseas via intermediaries whereas hoping for minimal interference from Beijing.

There have been discussions amongst judges, legal professionals, and police concerning the want for a constant nationwide coverage concerning seized cryptocurrencies. Some have proposed that the central financial institution take management over these belongings, whereas others have instructed establishing a sovereign crypto fund. 

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Leviathan has pointed to Hong Kong, which, with its extra favorable authorized framework for cryptocurrencies, has emerged as a possible vacation spot for China’s Bitcoin stockpile.

This case presents a novel problem for China, because the contradiction between its public denouncement of cryptocurrencies and its personal revenue from them turns into more and more obvious. 

Because the US strikes towards legitimizing cryptocurrencies on the federal degree, together with discussions on strategic reserves beneath President Donald Trump and his ongoing assist for crypto, China could discover itself compelled to reply, the skilled asserts.

Finally, Leviathan stated that the destiny of China’s 194,000 Bitcoin holdings is not going to solely form nationwide insurance policies however may additionally ship ripples throughout the worldwide monetary panorama. 

On the time of writing, BTC trades at $84,800, registering a 5% surge within the weekly time-frame. 

Featured picture from DALL-E, chart from TradingView.com