Bitcoin Drops as Gov’t Rules Out Buying More

[umair]

Bitcoin took a sharp hit after U.S. Treasury Secretary Scott Bessent confirmed the government has no plans to buy additional Bitcoin for its strategic reserve. Instead, the government will stick to holding only Bitcoin it has acquired through law enforcement seizures. While Bessent also mentioned they will stop selling those holdings, the announcement fell flat with investors who had been hoping for more proactive government accumulation.

The market responded immediately. Bitcoin dropped below the $119,000 mark, slipping from its earlier high near $124,000. This drop triggered a wave of liquidations across the crypto market, with over a billion dollars reportedly wiped out in leveraged positions. The decline also pushed Bitcoin through a key psychological support level, raising concerns of further downside pressure in the near term.

For weeks, there had been growing speculation that the U.S. might adopt a more aggressive Bitcoin accumulation strategy. Some analysts floated the idea of using budget-neutral tactics to increase holdings, including reallocation of funds or even gold revaluation. Those hopes were dashed today, and the market clearly wasn’t prepared for that reality.

The decision not to pursue new Bitcoin purchases reflects a cautious, conservative approach from the U.S. government. Instead of embracing Bitcoin as a strategic asset, officials appear more interested in managing what they already have—and doing so quietly. While some might see the choice not to sell as a small win for long-term adoption, it’s not enough to inspire new bullish momentum right now.

It’s clear that without institutional or government support in the near term, Bitcoin could face more choppy waters. The next few weeks will be critical for determining whether this drop is a short-term reaction or the start of a deeper correction. Either way, confidence in a government-backed Bitcoin strategy has definitely taken a hit.