Bitcoin experienced a downturn, dipping below a critical support level on Thursday. This followed remarks from U.S. Treasury Official Scott Bessent, who indicated the government is not planning further Bitcoin acquisitions for its existing Bitcoin and digital asset holdings.
The price of Bitcoin (BTC) retreated below the psychological threshold of $120,000, trading around $118,730 at the time of this report. This occurred just hours after it had reached a new peak value of $124,457 earlier in the day, according to Cointelegraph data.
The price drop was a reaction to comments made by Bessent during a Fox Business interview, where he confirmed that the administration would not be purchasing additional Bitcoin.
“We are entering the digital era with a Bitcoin reserve. While we won’t be actively buying more Bitcoin, we will continue to leverage seized assets to augment our holdings,” Bessent stated.
This declaration contrasts with a previous executive order from President Trump, which instructed government entities to formulate “budget-neutral methods” to expand the government’s Bitcoin reserves.
Earlier in April, Bo Hines, then serving on the Presidential Council of Advisers for Digital Assets, indicated that the administration was exploring different funding avenues for obtaining Bitcoin, including the use of tariff revenue and a reassessment of the Treasury’s gold certificate holdings.
This recent dip followed a brief period where Bitcoin’s market capitalization surpassed that of Google at $2.4 trillion, briefly making it the fifth-largest global asset, before the market reacted to the Treasury’s policy announcement.
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Bessent Announces: “We will cease selling” Bitcoin.
A positive aspect amid the discouraging policy update is Bessent’s affirmation that the U.S. government has no intention of selling its current Bitcoin inventory.
“We will stop selling. The current Bitcoin reserve value is estimated to range between $15 billion and $20 billion at today’s prices.”
Bessent’s sentiment mirrors that of White House AI and crypto advisor David Sacks, who described the Bitcoin reserve as “a digital Fort Knox for cryptocurrency,” stating the US would not divest any Bitcoin allocated to this reserve.
Sacks stated in a March 7 X post: “It will be preserved as a valuable store of wealth.”
Related: A substantial new player in crypto invests $1.3B in Ether ahead of the U.S. inflation releases.
Concurrently, the United States’ expanding national debt could encourage investors to recognize Bitcoin’s value as a safeguard against continuous inflationary trends.
The U.S. national debt exceeded $37 trillion for the first time on Wednesday. This situation has heightened expectations for a potential Bitcoin rally to unprecedented levels, influenced by projections of increased money supply. This growth is anticipated as the government attempts to manage the rising debt and foster economic activity.
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