January 27, 2025
By Our Correspondent
China’s government is estimated to have sold nearly $20 billion in Bitcoin, as reported by CryptoQuant CEO Ki Young Ju. This Bitcoin was confiscated from the PlusToken Ponzi scheme in 2019, which defrauded investors of billions. Ju suggests that approximately 194,000 BTC was gradually sold through exchanges such as Huobi.
While Chinese authorities previously indicated that the seized cryptocurrency was “transferred to the national treasury,” they did not specify whether it was sold or merely stored. Ju expressed skepticism regarding a censored government holding a cryptocurrency like Bitcoin, remarking, “A censored regime holding censorship-resistant money feels unlikely.”
Despite this sale, Bitcoin’s price remained relatively stable, maintaining a value above $101,000 as of January 23. However, in the 24 hours leading up to 12:22 a.m. UTC, Bitcoin’s price experienced a decline of over 3.7%, according to CoinMarketCap data. This drop may be linked to concerns over tightening monetary policies and potential global interest rate increases, which have fostered short-term bearish sentiment.
Ryan Lee, Chief Analyst at Bitget Research, pointed out that while these issues might exert some downward pressure on Bitcoin’s price, institutional buying could provide a stabilizing effect. He emphasized the importance of firms like World Liberty Finance in supporting the price. The resilience of Bitcoin can be partially attributed to ongoing institutional interest.
BlackRock, the largest asset manager globally, has been consistently acquiring Bitcoin, purchasing the cryptocurrency for five consecutive trading days leading up to January 21. On that day, the firm made its largest purchase of the year, acquiring $600 million worth of Bitcoin, as reported by Arkham Intelligence. This buying activity has contributed to the stability of Bitcoin’s price despite the sell-off from China.
The market is closely monitoring the monetary policy of the U.S. Federal Reserve. With ongoing apprehensions regarding potential interest rate increases, investors are seeking indications that the U.S. may lower rates in the upcoming months. The CME Group’s FedWatch tool suggests that the market anticipates an interest rate reduction by June 18, which could influence Bitcoin’s price in the short term.
The recent liquidation of PlusToken Bitcoin by China has not significantly affected Bitcoin’s price, largely due to sustained institutional backing. As the cryptocurrency market grapples with regulatory concerns and global economic conditions, the continued interest from institutions, particularly firms like BlackRock, remains crucial in maintaining the stability of Bitcoin’s price.
