China Bitcoin Reserves: What Happens If It Follows the US Playbook?

The U.S. recently initiated a Strategic Bitcoin Reserve under President Trump’s executive order, sparking speculation about China’s potential response and its own Bitcoin holdings strategy. With the U.S. holding approximately 198,109 BTC, discussions are ongoing about whether China possesses or plans to disclose a strategy mirroring this move. The competitive atmosphere is heating up as global stakes increase in the race for Bitcoin prominence.

As the landscape of cryptocurrency continues to shift, the question on everyone’s mind is: could China potentially mirror the United States’ new focus on Bitcoin? Speculation is on the rise since U.S. President Donald Trump signed an executive order on March 7 creating a “Strategic Bitcoin Reserve.” This reserve will be built on Bitcoin and other digital assets seized in criminal investigations, stirring the crypto pot even more.

Reports suggest that China may be quietly formulating its response to this executive order, aiming to establish its own national crypto strategy. This speculation heated up when Bitcoin advocate David Bailey hinted that China has been holding behind-the-scenes meetings regarding Bitcoin since the outcome of the 2024 U.S. elections. Yet, without official word from Chinese authorities, these claims remain in the realm of conjecture.

The looming question is how much Bitcoin China actually possesses. Should China choose to launch a Bitcoin reserve initiative, their holdings could give them a substantial position in the market, rivaling the U.S. The U.S. currently claims to hold around 198,109 BTC, cumulatively worth over $17 billion. Meanwhile, U.S. officials like David Sacks assert that Bitcoin won’t be sold from reserves, but treated more like a precious asset— a long-term play.

China’s official stance on its Bitcoin holdings is murky at best. The nation once seized nearly 195,000 BTC through a Ponzi scheme case back in 2020. The profits were earmarked for the national treasury, yet there’s been chatter about whether China even still holds those assets. In fact, CryptoQuant’s CEO Ki Young Ju speculated that China may have already offloaded its BTC hoard at some point, although his thoughts are just his views, without solid evidence.

If they still possess their Bitcoin and decide to respond in kind to the U.S. reserve strategy, it could push China into the upper echelons of Bitcoin ownership worldwide. And as the tension heightens between the U.S. and China, the rush for Bitcoin could reach fever pitch.

On the same day as Trump’s executive launch, Jan3 CEO Samson Mow remarked on X that the establishment of the Strategic Bitcoin Reserve would spark a competitive race among nation-states to adopt Bitcoin. Although some believe the U.S. strategy is lackluster for not immediately purchasing BTC, Mow insists the implications are huge. He mentions that there are marketing strategies that could allow the U.S. to acquire Bitcoin in alternative ways.

Mow issued an interesting take on current Bitcoin reserves, stating that the U.S. likely holds around 112,000 BTC or less. A significant chunk of this is likely returning to Bitfinex, leaving China potentially leading the pack as they possess a hefty chunk of 194K BTC. At this pivotal moment, it’s clear that the race for Bitcoin supremacy is heating up.

Meanwhile, in Hong Kong, lawmakers are dipping their toes into possible Bitcoin adoption mechanisms within the framework of the “one country, two systems” policy. Legislative Council member Wu Jiexhuang expressed that there should be careful consideration of how U.S. plans for Bitcoin could impact traditional markets. The strategies unfolding right now could redefine how nations interact with the emerging world of digital assets.

China might be gearing up to respond to the U.S. growing interest in Bitcoin reserves following President Trump’s recent executive order. Speculation suggests possible high-level talks in China about its Bitcoin strategy. Meanwhile, current U.S. holdings are notable, and the dynamics of nation-state competition over Bitcoin are becoming ever more pronounced. Hong Kong’s exploration of Bitcoin adoption could also be a crucial piece in this evolving puzzle. The next steps from both superpowers will be watched closely.

Original Source: cointelegraph.com