China crashes Bitcoin and stock markets thanks to cheap AI and rumor about sold crypto reserves

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Last Updated on 27 January 2025 by CryptoTips.eu

Bitcoin and the global stock markets crashed this morning after it became known over the weekend how cheap DeepSeek, a Chinese AI model that can compete with ChatGPT, can operate. On top of that, it seems you don’t necessarily need Nvidia chips to do so. The rumor that China has already sold its Bitcoin reserves is also causing a lot of panic in the cryptosphere.

At the time of writing, Bitcoin is trading at $99k.

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Whales

According to the global (known) data on Bitcoin reserves per country, China is the second largest Bitcoin Whale among countries (after the United States), with around 194,000 Bitcoins.

These funds were seized when the Chinese authorities stopped the operation behind the PlusToken. That was a Ponzi fraud which had stolen billions of dollars from ordinary Chinese people. The proceeds were those 194,000 Bitcoins. The Chinese government kept saying that these Bitcoins were transferred to the state, but gave no further details.

Cryptoquant CEO Ki Young Ju claimed earlier this week that the Beijing government has now completely sold off those reserves (without any negative impact on the price). If this is correct, how much institutional money is trying to buy Bitcoin right now?

Euro 2024

To know that we have to look at the past. Last year, during the Euro 2024 championship, Germany sold its Bitcoin reserves for an average price of around $60,000 per Bitcoin. This was because the Germans are legally obliged to sell seized assets within a two-year period.

That sale put pressure on the price, but because there was a lot of institutional demand, the Bitcoin price never fell below $50,000.

If China has indeed sold all their Bitcoins in the last six months or so, as Ki Young Ju claims (and he’s normally well informed), that means that it is unknown where support for Bitcoin would be found.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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