Bitcoin fell below $119,000 on Thursday following comments from US Treasury Secretary Scott Bessent that the government will not make additional purchases of the cryptocurrency to fund a Bitcoin reserve. The announcement sparked a swift market reaction, with traders reassessing the potential for institutional support in the crypto market.
Market response to Treasury statement
The cryptocurrency market reacted immediately, with Bitcoin dropping roughly 3% in early trading. Investors had speculated that further government BTC acquisitions could provide additional price support, and the clarification removed that expectation. Trading volumes increased as market participants adjusted positions, reflecting both short-term uncertainty and broader concerns over volatility in digital assets.
Implications for Bitcoin reserves and institutional adoption
Bessent emphasised that the Treasury’s current strategy prioritises existing reserves and conventional fiscal tools over new Bitcoin investments. Analysts note that while Bitcoin has attracted institutional interest over the past several years, the government’s reluctance to expand holdings underscores the asset’s continued classification as speculative and high-risk from a policy perspective. The move is unlikely to affect private sector adoption but may influence public perception and trading sentiment.
Technical indicators and price outlook
From a technical perspective, Bitcoin’s fall below $119,000 marks a key support level, potentially opening the door to further consolidation or mild correction. Analysts recommend monitoring trading ranges and liquidity levels closely, as investor sentiment is now heavily influenced by government statements, macroeconomic indicators, and regulatory developments.
Long-term considerations for investors
Despite short-term volatility, long-term proponents argue that Bitcoin remains a valuable store of digital wealth and a hedge against inflation. The Treasury’s stance does not diminish the fundamentals of the cryptocurrency, but it highlights the importance of realistic expectations regarding government involvement and institutional support. Investors are advised to balance exposure with risk management strategies, particularly given Bitcoin’s historically high price swings.
REFH – Newshub, 15 August 2025
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