China just pulled a fast one in the worst way possible – for Bitcoin and for its long-term financial interests. 

Those 194,000 Bitcoin from the PlusToken bust are officially back on the market.

CryptoQuant's CEO just exposed what might be the biggest covert crypto liquidation in history.

The PlusToken Plot

For those who either weren’t around or forgot, PlusToken was a massive Ponzi scheme that rocked China and South Korea in 2018-2019. 

Chinese authorities seized $4 billion in crypto, including 194,000 BTC, after it was all said and done.

Everyone thought they would hold it for the long term, but it turned out they were selling it all this entire time.

Talk about a surprise of the cycle.

The Detective Work

CryptoQuant's Ki Young Ju dropped the truth bomb on January 23. 

The evidence comes in the form of complex mixing patterns and suspicious Huobi flows dating back to 2019. 

As Ju put it: "There's no point in using mixers and multiple exchanges if they didn't sell it." 

Makes sense to us – why would China hold onto something designed to escape the tight control of their financial apparatuses?

To China’s credit, they played it pretty smart with this covert sale. 

First, they ran everything through mixers to hide the trail. 

Then, they spread it across exchanges, with Huobi getting a big slice. 

Finally, they sold slowly enough that nobody really noticed. 

From 2019 until now, they patiently divested from the entire hoard of Bitcoin.

The Market Is Shrugging It Off

While that’s a ton of Bitcoin, it seems like the market barely blinked on the news.

Down just 2.5% to $104,000 when it broke, and now back to where we were before it happened. 

Twenty billion dollars worth of Bitcoin sold, and the market hardly notices… could this be a bull market after all? 

This latest China slow burn tells a bigger story about governments and their real relationship with crypto. 

If China's been secretly selling since 2019, who else is playing the same game? 

And more importantly, who's doing the opposite and quietly stacking sats like El Salvador?

The Great (Bitcoin) Game

The good news is that the selling pressure occurred throughout a bear market and over the period of over four years.

If you’re China, the bad news is that you sold at rock-bottom prices for the cycle, and if you had just listened to the age-old wisdom and HODLd, you’d be a lot richer. 

Regulators are going to have questions. Lots of them. 

How did nobody catch this earlier? 

What does this mean for exchange oversight? 

And most importantly, if China could pull this off, what else don't we know about government crypto holdings?

The biggest takeaway from this story is what is says about nation-state-level buying and selling of digital assets.

Somewhere out there, there’s probably a mid-level nation that’s sitting on a larger stack than any other country in the world. 

But the truth always comes out eventually, and time will tell who the big HODLs, and likely winners, end up being.