China, U.S. Cut Bitcoin Reserves by 12% in Nine Months

In the past nine months, both China and the U.S. have significantly reduced their Bitcoin reserves, leading to a 12% decrease in total government holdings of the cryptocurrency. This shift in policy highlights a growing caution among major economies regarding the volatility and regulatory challenges associated with digital assets.

The reduction in Bitcoin reserves by these two global superpowers is a notable development in the cryptocurrency landscape. China, which has historically taken a stringent stance on cryptocurrencies, has continued to tighten its regulatory grip. The U.S., on the other hand, has shown a more nuanced approach, with regulatory bodies actively engaging in discussions about the future of digital currencies. The combined reduction in reserves by these two countries underscores a broader trend of governments reassessing their positions on Bitcoin and other cryptocurrencies.

As of April 2025, governments collectively hold over 463,741 BTC, which is roughly 2.3% of Bitcoin’s total supply. This marks a decrease from 529,591 BTC in July 2024, indicating a strategic move away from the cryptocurrency. The 12% decline in total government holdings of Bitcoin over the past nine months is a significant figure, indicating a strategic move away from the cryptocurrency. This reduction could be attributed to several factors, including concerns over market volatility, regulatory uncertainties, and the potential for digital currencies to disrupt traditional financial systems. Governments are increasingly aware of the need to balance innovation with stability, and the decision to reduce Bitcoin reserves reflects this cautious approach.

The implications of this trend are far-reaching. For one, it suggests that governments are becoming more risk-averse when it comes to digital assets. This could lead to stricter regulations and oversight, making it more challenging for cryptocurrencies to gain mainstream acceptance. Additionally, the reduction in reserves could impact the overall market sentiment, as investors may interpret this as a lack of confidence in Bitcoin's long-term viability.

However, it is important to note that the reduction in reserves does not necessarily mean that governments are abandoning cryptocurrencies altogether. Many countries are actively exploring the development of central bank digital currencies (CBDCs), which offer the benefits of digital assets without the volatility and regulatory challenges associated with decentralized cryptocurrencies like Bitcoin. This dual approach—reducing reserves in decentralized cryptocurrencies while investing in CBDCs—reflects a strategic shift towards a more controlled and regulated digital financial ecosystem.

While some governments, like El Salvador and Bhutan, are accumulating more BTC, others like the United States and Germany are cutting down. The U.S. remains the largest holder with 198,012 BTC, worth around $18.3 billion, although it’s slightly down from July 2024 after liquidating some assets. Next comes China, which, despite banning crypto trading and mining, holds 194,000 BTC valued at $17.6 billion. Most of China’s holdings came from the 2019 PlusToken Ponzi scheme. The United Kingdom holds 61,000 BTC, all seized from criminal activities. The government is still weighing whether to sell or use these funds for public finance needs. Bhutan, the small Himalayan nation, has impressively mined 8,594 BTC using sustainable hydroelectric energy. It’s one of the few countries accumulating Bitcoin through mining rather than seizures or purchases. Meanwhile, El Salvador has steadily built up 6,135 BTC worth $567.8 million and continues to buy 1 BTC daily as part of President Nayib Bukele’s strategy to integrate Bitcoin into the national economy. Since 2024, Ukraine has received 256 BTC worth $21.3 million in donations, which have been fully liquidated for military and humanitarian efforts. Germany sold its 46,359 BTC stash in mid-2024, which caused a 15.7% drop in Bitcoin’s price.

In conclusion, the reduction in Bitcoin reserves by China and the U.S. is a significant development that highlights the evolving attitudes of major economies towards digital assets. While the 12% decline in total government holdings indicates a growing caution, it also opens the door for new opportunities in the form of CBDCs. As governments continue to navigate the complexities of the digital currency landscape, the future of Bitcoin and other cryptocurrencies remains uncertain, but the trend towards greater regulation and oversight is clear.