Bitcoin’s Strategic Pivot: U.S. Treasury Reserve Move Amid Market Turbulence
In a landmark policy shift on February 5, 2026, the U.S. Treasury Department, under Secretary Scott Bessent, announced the indefinite suspension of its long-standing practice of auctioning seized Bitcoin. Instead, all such assets will be permanently held in a newly established 'Strategic Bitcoin Reserve.' This decisive move, explicitly framed as a long-term national financial strategy, was unveiled during a period of significant market stress. Concurrent with the announcement, the cryptocurrency market experienced a severe contraction, losing approximately $215 billion in total value. Bitcoin, the flagship digital asset, bore the brunt of the sell-off, plummeting by nearly $5,800 to breach the psychologically significant $90,000 support level. The sharp decline was attributed to a confluence of factors, with heightened political uncertainty cited as a primary catalyst driving investor anxiety and triggering widespread liquidations. The Treasury's new reserve policy represents a profound evolution in the U.S. government's stance toward Bitcoin, transitioning from viewing it purely as a seized commodity for monetization to recognizing it as a strategic financial asset. This institutional endorsement, albeit emerging during a downturn, sends a powerful signal about Bitcoin's perceived long-term value and legitimacy as a store of value on the national balance sheet. Analysts are divided on the immediate market implications: while the policy itself is structurally bullish, its announcement during a panic sell-off created a complex short-term narrative. Some view the sell-off as a typical 'sell the news' event amplified by macro fears, presenting a potential accumulation opportunity for long-term holders. Others caution that the market must first stabilize and digest the ongoing political uncertainty before the fundamental bullishness of the Treasury's custody move can be reflected in price action. Looking forward, the creation of the Strategic Bitcoin Reserve establishes a formidable, non-circulating holder in the market, effectively reducing the available supply over time—a dynamic that aligns with Bitcoin's core value proposition of scarcity. This development, coupled with the growing institutional adoption trajectory evident prior to the downturn, reinforces the bullish thesis for Bitcoin's future. Although the road to recovery may be volatile, with prices potentially testing lower supports, the foundational pillars for the next growth phase are being solidified. The $90,000 level is now a critical battleground, and a sustained hold or recovery above it could signal that the market has absorbed the shock, paving the way for a renewed focus on Bitcoin's long-term fundamentals, now paradoxically strengthened by the U.S. government's own strategic pivot.
US Treasury Halts Bitcoin Sales, Adds to Strategic Reserve Amid Market Decline
US Treasury Secretary Scott Bessent confirmed the administration's decision to retain all seized bitcoin in a Strategic Bitcoin Reserve, reversing previous auction practices. The announcement coincided with a sharp market downturn that saw BTC prices fall below $90,000.
Political uncertainty contributed to a $215 billion crypto market contraction as Bitcoin shed nearly $5,800 in value. The Treasury's move reflects a broader strategy to maintain federal control over confiscated digital assets while ostensibly supporting domestic innovation.
"This administration's policy is to add seized Bitcoin to our digital asset reserve," Bessent stated, emphasizing the permanent cessation of government BTC sales. Market observers noted the absence of plans for supplemental Bitcoin purchases exacerbated selling pressure.
Delaware Life Integrates Bitcoin Exposure into Annuity Products via BlackRock Index
Delaware Life has become the first U.S. insurer to embed cryptocurrency exposure within its fixed indexed annuity (FIA) offerings. The firm added BlackRock’s U.S. Equity Bitcoin Balanced Risk 12% Index, which utilizes the SEC-approved iShares Bitcoin Trust ETF (IBIT) for bitcoin price tracking.
The index will be available across three FIA products: Momentum Growth, Momentum Growth Plus, and DualTrack Income. BlackRock’s Robert Mitchnick emphasized the structure maintains downside protection while allowing policyholders measured participation in digital assets.
This milestone coincides with Bitcoin’s 17th anniversary and IBIT’s two-year mark, signaling crypto’s accelerating integration into traditional finance. The partnership reflects institutional confidence in Bitcoin’s maturation as an asset class.
Bitcoin’s Pullback Feels Brutal, But History Suggests Prolonged Recovery
Bitcoin has tumbled below $92,000, extending a sharp decline that began earlier this week. The sell-off reflects persistent downside pressure, though bulls are attempting to stabilize prices. Market sentiment remains fragile, with Leveraged positions unwinding amid heightened volatility.
Analyst Darkfost notes the current correction is 109 days removed from Bitcoin’s last all-time high. Historical patterns suggest prolonged recoveries—236 days in 2024 and 154 days in 2025—indicating this downturn may still be in its early stages. The intensity of recent losses, however, has amplified the sense of capitulation among short-term holders.
Despite the pain, Bitcoin’s cyclical structure remains intact. Choppy price action could persist for months without derailing the broader bull market. Realized losses and visible stress signals distinguish this correction from past resets, yet the asset’s resilience continues to anchor long-term confidence.
Bitcoin Valuation Against Gold Hits 4-Year Low as BTC Dips Below $90K
Bitcoin's price slipped below $90,000 amid escalating geopolitical tensions, while gold surged to a record high above $4,755 per ounce. Michaël van de Poppe, CIO at MN Capital, noted that Bitcoin's relative strength index (RSI) against gold has dropped to 30—a level historically associated with bear market bottoms in 2015, 2018, and 2022.
"History shows Bitcoin is extremely undervalued relative to gold. It’s wise to buy," van de Poppe declared. The divergence highlights potential for a catch-up rally, as gold's vertical ascent underscores Bitcoin's lagging performance.
Crypto investor Ansem attributed Bitcoin's underperformance to long-term holders liquidating positions below $100,000, coinciding with typical four-year cycle tops. Capitulation is expected to conclude by 2026, paving the way for renewed momentum.
Bitcoin Recovers in January as Spot-Driven Market Emerges
Bitcoin is attempting to stabilize above $91,000 amid fragile demand following weeks of volatility. Despite recent downward pressure, CryptoQuant data suggests January marks a recovery phase rather than a breakdown, driven by institutional accumulation while retail investors remain cautious.
A divergence between Bitcoin's spot price action and funding rates in early 2026 signals a spot-dominated market—a constructive development that reduces reliance on leveraged derivatives. Historical parallels to 2021 and 2024 cycles show such conditions often precede sustained rallies of 20%-50%, as organic inflows replace speculative positioning.
The report raises broader questions about Bitcoin's four-year cycle resilience, noting whale activity contrasts with retail hesitancy. Binance data underscores this shift toward spot-driven momentum, which historically dampens liquidation risks and fosters more durable price appreciation.
SkyBridge Capital Adjusts Portfolio Amid Market Volatility, Maintains Bitcoin Conviction
SkyBridge Capital founder Anthony Scaramucci revealed at Davos that the firm is increasing macro trades as political uncertainty under President TRUMP fuels market turbulence. The alternative asset manager's Opportunity Fund shifted to 69% macro exposure by September 2025, down from 65% in crypto assets earlier that year.
Despite Bitcoin's sharp retreat from its October 2025 peak of $126,000—a MOVE that triggered $19 billion in leveraged liquidations—Scaramucci remains bullish. "This is a timing issue, not direction," he told Reuters, noting the cryptocurrency's fundamentals remain intact amid industry consolidation.
