Bitcoin sinks after Treasury Secretary Bessent says US government can’t tell banks to bail out crypto
Bitcoin (BTC-USD) fell 2% on Wednesday to around $73,000 per token after Treasury Secretary Scott Bessent said the US government would not bail out the cryptocurrency.
In a heated exchange during a House Financial Services Committee hearing, Bessent was asked whether the U.S. Treasury has the authority to purchase bitcoin or other cryptocurrencies.
“I don’t have the authority to do that, and I don’t have that authority as chairman of the FSOC,” Bessent said.
Wednesday’s decline was also driven by broader selling pressure in markets and prominent investor Michael Burry’s warning that a sustained decline in the price of Bitcoin “could set in motion a death spiral that will lead to massive value destruction.”
Burry, who rose to prominence after predicting the 2008 financial crisis, wrote on his Substack: “Bitcoin has been exposed as a purely speculative asset and is nowhere near the risk of depreciation trading that gold and other precious metals are.”
The move lower only added to Bitcoin’s recent rout. The world’s largest cryptocurrency has fallen 13% in the last five days.
The world’s largest cryptocurrency fell sharply last weekend, reaching its lowest levels since last April and suffering a fourth straight month of losses.
This decline coincided with President Trump’s announcement on Friday that he would pick Kevin Warsh to chair the Fed when Jerome Powell’s term ends in May; candidacy markets are hawkish on this situation.
Ether (ETH-USD) and other digital tokens also fell.
Read more: How to navigate the crypto meltdown?
With Bitcoin’s next support level at $73,000, “current flows suggest sentiment has shifted meaningfully,” 10X Research strategists wrote in a recent note.
The firm’s strategists noted streaming and positioning data that showed “investors are not yet in a position to buy the dip.”
“While sentiment and technical indicators are approaching extreme levels, the overall bearish trend remains intact,” the researchers wrote. “In the absence of a clear catalyst, there is little urgency to engage.”
The firm noted that investors are focusing on removing and unwinding their positions rather than preparing for a typical comeback rally.
The pressure on digital assets reflected broader fragility in the crypto market. Aside from a brief rally last month, Bitcoin has been struggling since October, when whale sell-offs and forced liquidations wreaked havoc on the industry.
