Clarification on Bitcoin Reserve Strategy
US Treasury Secretary Scott Bessent issued a clarification via social media, stating that the Treasury continues to explore budget-neutral pathways to acquire additional Bitcoin for the Strategic Bitcoin Reserve. This remark followed earlier comments to FOX Business indicating that no further purchases were planned, which spurred a rapid sell-off in the Bitcoin market.
Market Impact of Initial Remarks
The initial FOX Business interview saw Bitcoin’s price plunge from $121,073 to $118,886 within 40 minutes, erasing nearly $55 billion in market capitalization. Futures and spot markets registered increased volatility, with traders reacting to perceived policy shifts. Funding rates across major exchanges briefly spiked as longs unwound positions in response to the news.
Budget-Neutral Acquisition Pathways
Bessent emphasized that the March 6 executive order established both the Strategic Bitcoin Reserve and a Digital Asset Stockpile using forfeited assets. The order explicitly allowed for additional acquisitions via budget-neutral strategies that impose no incremental cost on taxpayers. Possible funding mechanisms under consideration include revaluation of Treasury’s gold certificate holdings and repurposing tariff revenue.
Need for Congressional Approval
The Treasury Secretary noted that congressional authorization may be required for budget-neutral Bitcoin purchases beyond confiscated assets. Senator Cynthia Lummis, an early proponent of the Bitcoin Reserve initiative, has introduced complementary legislation to empower the Treasury with clear authority to execute such acquisitions under budget-neutral terms.
Commitment to Halting Sales
On the same broadcast, Bessent reaffirmed that the US would cease selling any Bitcoin currently held in the reserve. He estimated the reserve’s valuation between $15 billion and $20 billion, aligning with third-party data indicating the government holds approximately 198,012 BTC worth $23.5 billion.
Market Reaction and Future Outlook
Following the clarification, Bitcoin’s price stabilized around $118,500. Analysts caution that volatility may persist until formal guidance on funding mechanisms is released. Market participants will also monitor the forthcoming Digital Asset Working Group report for actionable recommendations on executing budget-neutral purchases.
Conclusion
The Treasury’s stance on exploring budget-neutral acquiring methods underscores ongoing commitment to the Strategic Bitcoin Reserve. While initial misinterpretation of comments led to market turbulence, the clarification has provided a clearer framework. Observers now await legislative developments and Treasury reports for concrete implementation strategies.
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