Countries Owning Bitcoin: How Will the Dispute Between China and the U.S. Resolve?

China has accused the United States of stealing 127,000 Bitcoins (BTC), valued at about $13 billion. It is alleged that the theft happened in 2020, when the BTCs were stolen in a Chinese mining pool. This most recent allegation cast some doubt on the role of the state-sponsored entities in the heist and heightened the existing tensions between the U.S and China in the digital currency arena.

Source: X

127,000 BTC Stolen from a Chinese Mining Pool

In 2020, a Chinese mining pool was said to have become a victim of a massive security breach. In this hack, 127,000 BTC was stolen, worth about $1 billion at that time. The hackers are said to have committed the theft; however, China has recently made some claims pointing at the U.S. government as being involved. The government of China claimed that the Bitcoins were confiscated or stolen by state actors, making a crime a geopolitical affair.

This raised some very frightening questions concerning the safety of digital assets as well as the possibility of the existence of interference or repossession of the assets by the major powers. The fact that China said that the U.S. could be a contributor to this theft is an indication that a new stage has been reached in the battle for control of cryptocurrencies. No matter how they are conducted in covert operations, direct capture, or state-sponsored hacks, these represent a sign of the growing militarisation of the digital currency space.

At the time of the theft of the Bitcoins, their prices varied between $7,000 and $10,000 per BTC. Nevertheless, as Bitcoin has increased to greater heights in the coming years, the stolen 127,000 BTC is now estimated at approximately $13 billion at the present market rate.

Bitcoin Holdings across the World

Nations across the globe have been hoarding Bitcoin due to several reasons, which include investing, economic policy, and need to have an interest in the future of digital currencies. Although most governments are yet to be proud to report their complete Bitcoin reserves, some countries are known to bear huge quantities of BTC.

Nations BTC Holdings | Source: Bitcoin treasuries

It is estimated that the United States has a considerable share of Bitcoin. This is mostly attributed to the role of the U.S. government in the confiscation of Bitcoin in the investigations of the crimes. The U.S. government confiscated more than 69,000 BTC of the Silk Road case hack in 2020, which was worth $1 billion at that time. In addition to this, the holdings of Bitcoin by institutions, including MicroStrategy, Tesla and Grayscale have also helped the U.S. to have a significant stake in Bitcoin.

By the end of 2021, the U.S. had an estimated amount of 198,000 BTC, which is why the country can be considered one of the largest Bitcoin holders in the world.

Although China used to be a hostile country towards cryptocurrencies, especially regarding domestic mining, it is regarded as one of the largest Bitcoin holders in the world. Despite the Chinese government shutting down several cryptocurrency mining firms in the year 2021, Chinese firms have amassed large sums of BTC over the years. China has been estimated to have 194,000 BTC, hence it is among the leading Bitcoin holders in the world.

Bitcoin is also in considerable possession of other countries and establishments, whether through direct acquisition, mining, or confiscation. An example of such a country is El Salvador, which appeared in the news in 2021 by becoming the first country to legalize Bitcoin. The government has since amassed 7,475.4 BTC as of press time and as part of the move to incorporate Bitcoin in the national economy.

Ukraine has been able to hold closer to 46,351 BTC by way of donations and government projects. Cryptocurrency has been used to finance the defense capabilities of the nation, as well as to circumvent the conventional financial systems whenever the nation is at war. The business intelligence company known as MicroStrategy is a large corporate holder of Bitcoin, as it holds more than 124,000 BTC. The Grayscale investment firm owns over 650,000 BTC in its Grayscale Bitcoin Trust (GBTC), which is considered to be one of the largest in the world.

These assets reinforce the importance of Bitcoin in the international arena and its rising popularity among both governments and institutional investors in holding the cryptocurrency. The more nations and institutions accumulate Bitcoin as a store of value and geopolitical property, the more significance this technological solution will gain.