Despite maintaining a strict ban on cryptocurrency activities domestically, China is now very close to becoming the world’s largest government holder of Bitcoin. According to public estimates, the amount of Bitcoin controlled by the Chinese government is only about 4,012 BTC behind that of the United States.

Most of these holdings did not come from strategic investment, but rather from assets seized in criminal cases involving fraud, money laundering, and illegal cryptocurrency exchanges. This creates a striking paradox:

1. On the surface: China enforces a hardline stance against crypto, banning trading and mining.

2. In reality: the state has quietly become one of the world’s largest Bitcoin “whales.”

If China surpasses the U.S., it would rank first globally in terms of Bitcoin held by a government, despite not recognizing Bitcoin as a legal asset within its financial system. This raises several important questions:

1. Will China continue to hold, gradually sell, or eventually use Bitcoin as a strategic asset?

2. How might such large holdings impact monetary policy, state asset management, and geopolitical positioning?

As Bitcoin is increasingly viewed as a strategic reserve asset by various countries, China’s silence and its approach to managing these holdings may ultimately prove more significant than its past public statements banning cryptocurrencies.