Bitcoin Drops Below $119K Following Treasury Secretary’s No Buy Announcement

Bitcoin experienced a sharp decline after the US Treasury announced it would not purchase additional Bitcoin for its strategic reserve. Prices peaked at approximately $124,120 before dropping to around $118,550.

Treasury's Stance

Treasury Secretary Scott Bessent stated the government will not buy more Bitcoin; future holdings will come from confiscated assets.
The current value of the Bitcoin reserve is estimated between $15 billion and $20 billion.
This announcement contrasts with a previous executive order by President Trump aimed at expanding Bitcoin reserves through budget-neutral plans.

Market Reaction

The sell-off wiped out significant gains, with Bitcoin dropping from about $121,050 to as low as $117,201 within an hour.
Liquidations in the crypto futures market were around $450 million during this period.
The sudden market shift was attributed to clarified policy, as earlier optimism regarding government buybacks diminished following Bessent's comments.

Macroeconomic Context

Bessent linked balance-sheet strategies to rising tariff revenues, reporting nearly $30 billion collected in July.
Annual tariff receipts could exceed $300 billion, which may support other asset strategies.
Recent US economic data showed the Producer Price Index rose 3.3% year-on-year and 0.9% month-on-month for July.

Funding Model Shift

The reliance on confiscated assets instead of direct purchases indicates that reserve growth will be gradual and dependent on law enforcement actions.
This approach removes a predictable buyer from the market, contributing to increased price volatility.

Featured image from Unsplash, chart from TradingView