Chinese stocks are plunging this Monday, September 28. The CSI 300 is down around 2.2%, while the Shanghai Composite has fallen nearly 1.8%. At the same time, Bitcoin has retreated to around $83,400 after spending the weekend above $84,000. A viral post claims that 2.5 trillion yuan disappeared from the Chinese market in fifteen minutes and that Beijing was liquidating its U.S. Treasuries to stop the decline. The first figure remains difficult to confirm precisely. The second is misleading as it stands.
China loses more than 2% on the CSI 300
BrefCrypto is already tracking Bitcoin’s sensitivity to economic releases. The session had begun much more calmly. At the open, the Shanghai Composite was down just 0.26%, Shenzhen was off 0.38% and the CSI 300 had slipped 0.35%. A few hours later, the move had clearly worsened: the CSI 300 was trading around 4,340 points, down approximately 2.2% and at its lowest level since March.
Technology is among the sectors under pressure, as the broader Asian backdrop is already weakened by rising oil prices and bond yields.
For Bitcoin, this deterioration comes as the crypto market also remains highly sensitive to macro risk. BrefCrypto recently observed that U.S. economic releases are now prompting strong reactions in Bitcoin. BTC is down around 1.2% today, trading near $83,400 after opening the session close to $84,500.
However, a shortcut should be avoided: there is still nothing to establish that the decline in Chinese stocks is directly responsible for Bitcoin’s drop. Rather, both moves are taking place in a broader environment that is less favorable to risk assets.
The figure of 2.5 trillion yuan, or around $350 billion, is circulating widely. A loss of that magnitude in market capitalization is not impossible in a Chinese market worth several tens of trillions of yuan. However, I found no credible institutional or financial confirmation establishing that it occurred precisely within fifteen minutes.
Beijing is not liquidating “all” its Treasuries
It is mainly the second part of the message that is problematic.
The latest available U.S. Treasury data show that mainland China held $618 billion in Treasuries in July, compared with $633.4 billion in June and $695.3 billion in January. Beijing is therefore effectively reducing its exposure over a longer period.
But a $15.4 billion decline between June and July does not amount to an emergency liquidation of the entire portfolio.
Official U.S. Treasury data also show that China remains one of the largest foreign holders of U.S. debt.
And yet, one element makes the situation even more interesting: Reuters reported on September 4 that several Chinese banks had recently increased their purchases of Treasuries. They were taking advantage in particular of high U.S. yields and an increase in dollar deposits.
In other words, two phenomena can coexist. China’s official reserves may be gradually declining, while Chinese financial institutions continue to buy U.S. debt from time to time.
Claiming that China is “aggressively selling all its Treasuries to prevent a collapse” therefore goes far beyond the available data.
Bitcoin enters an uncomfortable macro environment
The timing nevertheless deserves attention.
Bitcoin is trading near $83,400 after surpassing $87,000 last week. The level remains above the zones BrefCrypto was monitoring in late August, when BTC was still attempting to turn $82,000 into a regime-change threshold.
Since then, the environment has hardened. Bond yields are rising, oil remains elevated and Asian markets are showing greater nervousness. The week will also bring U.S. PCE inflation data, JOLTS, GDP, the ISM and the employment report.
That is a lot to absorb in four days.
A prolonged decline in Chinese stocks would add another layer to the global risk-off move. If it were genuinely accompanied by an acceleration in Chinese Treasury selling, the consequences could be more serious: potentially higher U.S. yields, liquidity strains and additional pressure on risk assets.
We are not there yet.
For now, the verifiable fact is more straightforward: Chinese stocks are falling sharply and Bitcoin is declining alongside risk markets. The 2.5 trillion yuan figure still requires confirmation, while the alleged massive Treasury liquidation is not supported by the available data.
BrefCrypto had already observed how Bitcoin can quickly come under pressure when oil, the Fed and geopolitical tensions converge. Today’s Chinese session adds another risk to that equation.
