TLDR
- President Trump signed an executive order establishing a US “Strategic Bitcoin Reserve” on March 7
- China seized 195,000 Bitcoin from the PlusToken scheme in 2020, worth over $17 billion
- China is considering ramping up economic stimulus measures amid trade tensions with the US
- Speculation grows that China may develop its own national Bitcoin strategy to counter US moves
- Bitcoin price has fluctuated between $80,000-$90,000, with predictions of potential future growth
The crypto world is about to witness global economic competition as both the United States and China appear to be positioning themselves in the Bitcoin market.
Recent developments suggest that a race for national Bitcoin reserves may be underway between the world’s two largest economies.
On March 7, US President Donald Trump signed an executive order establishing a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.” This move marks a major shift in US policy toward cryptocurrency. The reserves will be funded using Bitcoin and other digital assets that were seized in government criminal cases.
The US government currently holds approximately 198,109 Bitcoin, valued at more than $17 billion. According to White House AI and crypto czar David Sacks, the US plans to treat these holdings as a long-term store of value rather than selling them off.
The Bitcoin price has been volatile in recent weeks. It dropped below $80,000 before climbing back to over $90,000 per coin. This recovery came as reports surfaced about Trump’s Commerce Secretary Howard Lutnick confirming what some are calling a “Trump bombshell” related to cryptocurrency policy.
China may be developing its own response to the US Bitcoin strategy. David Bailey, a Bitcoin advocate who helped influence Trump’s views on cryptocurrency, claims that China has held closed-door meetings about Bitcoin since the 2024 US elections. However, these claims have not been officially confirmed by Chinese authorities.
In 2020, Chinese authorities seized nearly 195,000 Bitcoin from the PlusToken Ponzi scheme. A ruling from the Yancheng Intermediate People’s Court stated that profits from these confiscated assets were moved to the national treasury.
It remains unclear whether China still holds these Bitcoin reserves. CryptoQuant founder Ki Young Ju has speculated that China might have already sold its Bitcoin stash, suggesting it’s unlikely the country would hold what he calls “censorship-resistant money.” However, he noted this was only his personal opinion.
🇨🇳 China sold 194K #Bitcoin already, imo.
PlusToken’s seized BTC in 2019 was sent to Chinese exchanges like Huobi. The CCP said it was “transferred to the national treasury” without clarifying if it was sold.
A censored regime holding censorship-resistant money feels unlikely. pic.twitter.com/ODHD9rSR0d
— Ki Young Ju (@ki_young_ju) January 23, 2025
If China still possesses these reserves and decides to follow a strategy similar to the US, it would become one of the largest Bitcoin holders globally. Jan3 CEO Samson Mow points out that a significant portion of US holdings will be returned to crypto exchange Bitfinex, leaving the US with around 112,000 Bitcoin or less.
This would potentially put China in a leading position with its 194,000 Bitcoin. Mow suggests that the US might not accept falling behind China in reserves and could add more Bitcoin to its stockpile.
China’s economic policies may also indirectly impact Bitcoin prices. The country is considering ramping up its economic stimulus measures, according to reports. China’s central bank governor Pan Gongsheng confirmed that the People’s Bank of China will cut interest rates and inject liquidity into the financial system “at an appropriate time.”
Trade Tariffs
These stimulus plans have reportedly been accelerated by Trump’s trade tariffs on China. In November, China unveiled a $1.4 trillion debt package to ease local government financing strains and stabilize economic growth amid pressures from Trump’s re-election.
Past instances of Chinese monetary stimulus have seen excess liquidity flow into alternative assets. A spokesperson for the bitcoin and crypto platform Nexo told The Block that “Such stimulus could have broader implications for global markets, increasing appetite across equities and alternative assets.”
Arthur Hayes, cofounder of BitMex and now head of the Maelstrom investment fund, warned investors to “Watch out for China.” He predicted a “final filthy fiat financial market convulsion before the globe, led by the U.S., can reflate and take bitcoin” beyond $1 million.
Hayes also noted that Chinese President Xi Jinping aims to keep the yuan stable against the dollar. “If the dollar supply increases, he can instruct the People’s Bank of China to increase the yuan supply, ensuring the dollar-yuan exchange rate remains stable,” Hayes wrote in a blog post.
While Beijing’s official stance on Bitcoin reserves remains uncertain, Hong Kong lawmakers are exploring the potential for Bitcoin adoption within China’s “one country, two systems” framework. On December 30, Wu Jiexhuang, a member of Hong Kong’s Legislative Council, said Hong Kong could study the market impact of spot Bitcoin exchange-traded funds in the US.
The legislator noted that Trump’s proposal to make Bitcoin a strategic reserve asset might impact traditional markets. This suggests that even if mainland China remains cautious, Hong Kong could serve as a testing ground for cryptocurrency policies.
As the US moves forward with its Strategic Bitcoin Reserve, Samson Mow believes this event sparks the “real race” for nation-state Bitcoin adoption.
Some Bitcoiners are saying the Strategic Bitcoin Reserve doesn’t do anything because it’s just seized assets and there’s no buying.
Well, there will be buying. There are a number of “budget neutral” ways to acquire Bitcoin such as issuing #BitcoinBonds or selling gold. Give it… pic.twitter.com/zBxYhQwMZ8
— Samson Mow (@Excellion) March 7, 2025
He also pointed out that there are “budget neutral” ways for countries to acquire Bitcoin, including issuing bonds or selling gold.
