From PlusToken to National Reserves, how China Became the Second Largest Bitcoin Holder in the World

A seemingly contradictory phenomenon is emerging: China has completely banned cryptocurrency trading and mining at the policy level, yet at the national level, it has quietly accumulated Bitcoin reserves close to the scale of the United States. According to the latest reports, the Chinese government currently controls approximately 194,000 BTC, approaching the US’s 198,000 BTC, a figure that is enough to rewrite our understanding of “national asset allocation.”

The Contradiction Between Policy Bans and National Holdings

Comparison of Bitcoin Reserves in China and the US

This comparison reveals a deeper logic: government restrictions on public crypto trading do not equate to denying Bitcoin’s intrinsic value. China’s approach is essentially a “front-end ban, back-end holding” strategy, reflecting Bitcoin’s special status in national-level asset allocation.

PlusToken Case: From a Risk Event to a National Asset

The PlusToken incident occurred in 2019, involving large-scale illegal crypto asset transfers. Law enforcement agencies subsequently took control of these assets, and China unexpectedly became one of the world’s largest government-held Bitcoin holders. This was not an active strategic deployment but a result of judicial asset recovery, yet it highlights a reality: when large-scale crypto assets are seized by the state, the government’s choice is not destruction but retention and management.

In contrast, most of the US’s Bitcoin holdings come from asset seizures during multiple cross-border law enforcement actions. Although the acquisition paths differ, both countries made the same choice—to retain these Bitcoins as strategic reserves.

The Strategic Shift in Bitcoin’s Status

From Investment Asset to Reserve Asset

According to industry analysis, these Bitcoins are more like strategic reserves, functioning similarly to gold or foreign exchange, used for hedging and liquidity in extreme financial environments. This is a crucial point: it indicates that Bitcoin is being viewed at the national level as a digital asset with long-term store-of-value potential, not just a speculative tool.

Currently, Bitcoin’s price is $87,977.81. China’s 194,000 BTC reserves are worth about $170 billion. While this scale is not huge relative to national foreign exchange reserves, it is enough to demonstrate that Bitcoin’s position in official asset allocation has shifted from “risky asset” to “strategic reserve.”

A New Variable in Market Supply Structure

This phenomenon also alters the supply structure of the Bitcoin market. According to relevant data, the current circulating supply of Bitcoin is 19.99 million BTC (95.15% of total supply), with a market cap of $1.76 trillion, accounting for 59.01% of the total market. If the combined holdings of China and the US amount to about 400,000 BTC (conservatively estimated), this means a significant proportion of the globally circulating Bitcoin is locked at the national level and cannot enter market circulation.

The impact on the market is twofold: on one hand, government holdings provide a psychological price floor; on the other hand, the long-term locking of these Bitcoins reduces effective market supply.

Market Reactions

Investors are increasingly paying attention to the amount of Bitcoin held by various governments, as this not only affects the supply structure but also, to some extent, reflects implicit recognition of digital assets by states. The shrinking gap between China and the US in Bitcoin reserves sends a clear signal: Bitcoin’s global strategic position is becoming more apparent.

It is worth noting that this government-level holding does not change China’s regulatory stance on cryptocurrency trading, but it does confirm a fact—the value of Bitcoin as a digital asset has been recognized by national decision-makers.

Summary

The exposure of China’s 194,000 BTC breaks a stereotype: policy bans do not equate to a denial of value. These 194,000 BTC, seized from the PlusToken case, have now become a strategic reserve, comparable in scale to the US holdings. This phenomenon reflects that Bitcoin is transitioning from a speculative asset to a strategic reserve asset, with official recognition that surpasses mere policy statements. For the market, the key is to understand how government holdings influence supply structure and what this indicates about long-term national attitudes toward digital assets.