From Record High to Rapid Fall: US Treasury Shocks Bitcoin Market

TLDR

Bitcoin fell below $119,000 after the US Treasury Secretary said there would be no new Bitcoin purchases for the reserve.

The cryptocurrency dropped from an all-time high of $124,457 earlier in the day to $118,730 within hours.

US Treasury Secretary Scott .

The US national debt reached $37 trillion, which could influence Bitcoin demand as a hedge against inflation.

The policy shift ended speculation that the US Treasury would expand its strategic Bitcoin reserve using alternative funding sources.

Bitcoin dropped sharply on Thursday after the US Treasury Secretary ruled out new purchases for the national Bitcoin reserve. The cryptocurrency fell below the $120,000 support level within hours of hitting an all-time high earlier in the day. Market sentiment shifted quickly following remarks that confirmed no additional acquisitions would be made.

stood between $15 billion and $20 billion at current prices.

In March, Bessent supported halting the sale of seized Bitcoin and adding it to the national reserve. He argued that keeping Bitcoin onshore would strengthen the US position in the global cryptocurrency market. The US Treasury adopted this stance while maintaining regulatory oversight of digital assets.

White House AI and crypto adviser David Sacks described the reserve as “a digital Fort Knox for cryptocurrency.” He said coins placed in the reserve would serve as a store of value. The US Treasury’s refusal to expand purchases tempered earlier enthusiasm from administration officials.

In April, adviser Bo Hines said the government explored funding Bitcoin acquisitions through tariff revenues and gold certificate reevaluations. These proposals fueled speculation about significant expansion of the reservever, the US Treasury’s latest position effectively halted those expectations.

Market Reaction and Economic Context

Bitcoin price traded at $118,730 after the announcement, falling from the day’s record of $124,457. The drop came hours after Bitcoin briefly surpassed Google’s market