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China’s Bitcoin ban will likely remain in place. Market expectations are at only 2%.
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In 2019-2020, over $50 billion worth of crypto left China, leading to stricter regulations.
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China, the U.S. and Japan are the two countries with the largest Bitcoin holdings, totaling $55.3 Billion.
China’s stance towards cryptocurrency regulation continues dominate discussions, particularly as rumors circulate regarding a possible reversal to its 2021 Bitcoin prohibition. Recent data suggests, however, that the likelihood of China lifting their Bitcoin ban by March 31 2025 has decreased significantly.
In 2021, China’s People’s Bank banned all digital currency transactions nationwide, citing their role in facilitating criminal activity and disrupting the traditional financial system. Blockchain data from Chainalysis shows that between 2019 and 2020 more than $50 billion in digital currencies left East Asia, with much of this money being linked to Chinese investors who moved capital abroad.
This significant outflow, coupled with high activity levels on the local cryptocurrency exchanges, contributed to China’s strict crackdown against digital assets.
Related: European Central Bank Signals Potential Regulations for Bitcoin
Market Sentiment: Decreasing Chances of Bitcoin Ban Reversal
Data from Polymarket which tracks probabilities relating to policy changes highlights the declining optimism surrounding China’s Bitcoin regulation.
- In December 2024 the probability that China would reverse its Bitcoin ban was 20%.
- By January 2025 this figure had fallen to just 2%.
The drop in probabilities reflects the growing belief that China’s rigid stance towards cryptocurrencies will continue at least until March 2025.
Related: China’s Bitcoin Enigma – Why Beijing is Hiding its Energy Data
Bitcoin Holdings Across the Globe
China has strict regulations regarding Bitcoin, but still holds a large amount of the cryptocurrency. A report on Bitcoin investments by nine countries shows that China and the United States are leading global investors in Bitcoin.
Other notable countries with Bitcoin holdings include Ukraine, El Salvador and Germany, although their holdings are much smaller. These nations collectively hold over 529,000 BTC worth approximately $55.3 billion.
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