Just hours after declaring the U.S. government wouldn’t buy more Bitcoin, Treasury Secretary Scott Bessent had a change of heart. He announced plans to explore other ways to get more units of the digital currency. This turnaround came quickly, causing a stir among those watching the crypto markets.
Earlier in the day, Bessent had been pretty clear. In an interview with Fox Business, he said the government wouldn’t spend money to add Bitcoin to its national reserves. He suggested the only way to grow these holdings would be by seizing funds tied to illegal activities. But later reports told a different story. Bessent stated his department is “committed to exploring budgetarily neutral ways to acquire more Bitcoin and expand the reserve.” This subtle shift gave crypto supporters hope, making them think the official stance had changed.
The Strategic Reserve’s Roots
The idea for a strategic Bitcoin reserve came from President Donald Trump. He ordered its creation in March through an executive decree. Bessent has backed this initiative from the start.
The Secretary explained that Bitcoin seized or confiscated by the government would form the “base” of this reserve. These holdings would mostly come from court cases and illicit operations caught by authorities. Initially, Bessent said the reserve would only include the Bitcoin the government already owned, valued between $15 billion and $20 billion. He emphasized there were no immediate plans for new purchases. The project itself has seen some internal team changes. In early August, Bo Hines, who led the White House Digital Asset Advisory Council handling reserve matters, left his post.
Market’s Take
By late Thursday afternoon in the United States, Bitcoin was trading near $118,000. This was a sharp drop from its record high of $124,000, reached just hours earlier. This fall happened around the same time a Producer Price Index (PPI) report came out. The report showed inflation figures that were much higher than market predictions.
This economic data put a damper on hopes that the Federal Reserve would cut interest rates in September. That expectation had fueled Bitcoin’s recent price climb. The day’s price dip showed clearly how Bitcoin’s value swings are still tightly linked to economic numbers and the Fed’s money policies.
Looking Ahead
Bessent’s statements caused some confusion. Yet, his talk of “budgetarily neutral ways” could mean the government is looking for creative ways to get Bitcoin without spending new public money. People are guessing this might involve using money from auctions of seized assets. Or maybe even swapping other government-owned assets.
Still, the market will keep a close eye on the Trump administration and the Treasury Department’s next moves. Any firm announcement about Bitcoin purchases could immediately impact its price.