Treasury Chief’s U-Turn Sparks Market Chaos—Then Damage Control

Another day, another policy whiplash from the suits in charge.

The Backpedal Heard 'Round Wall Street

Markets convulsed after Treasury's latest flip-flop—proving yet again that centralized financial players react first, think never. Trading floors erupted in panic as algorithms amplified human uncertainty into double-digit swings.

Damage Control Mode Activated

Within hours, the same officials who triggered the sell-off were scrambling to 'clarify' their position—a classic move from the bureaucratic playbook. Because nothing stabilizes markets like hastily walking back hastily announced policies.

The Crypto Angle

Bitcoin volatility spiked 30% during the fiasco—because when traditional finance sneezes, digital assets catch pneumonia. Meanwhile, DeFi protocols quietly processed record volumes as traders bypassed traditional gatekeepers entirely.

Final thought: Maybe the real 'stablecoin' was the friends we lost along the way to another government-induced market meltdown.

In brief

• On August 14, an ambiguous statement by Scott Bessent caused a sharp drop in Bitcoin’s price.
• The U.S. Treasury stated it did not intend to buy Bitcoin, triggering market instability.
• A few hours later, Bessent reversed his remarks, assuring that purchases remain “budgetarily possible.”
• Criticism is mounting in the crypto ecosystem, which denounces a lack of action and confusing communication.

A media appearance that sows confusion

It all started this Thursday with an interview given by Treasury Secretary Scott Bessent to Fox Business, in which he made remarks that quickly caused a reaction in the market, while Bitcoin had just crossed the $124,000 mark. He notably stated :

“We have also begun to enter the 21st century, with a bitcoin reserve. We are not going to buy any, but we will use seized assets and continue to accumulate them”.

These statements were interpreted as an official renouncement of any active bitcoin purchase by the United States. Such a perception immediately caused a sharp market drop, and the reaction of investors was quick :

• The bitcoin price dropped from $121,073 to $118,886 within 40 minutes ;
• $55 billion in market capitalization was erased, according to CoinGecko data ;
• The domino effect affected the entire crypto market, weakened by this unexpected statement.

Aware of the impact of his remarks, Scott Bessent attempted a backpedal a few hours later on the social network X. He wrote : “the Treasury remains committed to exploring budget-neutral solutions to acquire more bitcoin to expand the reserve, and fulfill the President’s promise to make the United States the world bitcoin superpower”.

Bitcoin that has been finally forfeited to the federal government will be the foundation of the Strategic Bitcoin Reserve that President TRUMP established in his March Executive Order.

In addition, Treasury is committed to exploring budget-neutral pathways to acquire more…

This clarification constitutes a partial disavowal of his own earlier remarks during the day and confirms that the option of bitcoin purchases remains officially under consideration, despite the lack of concrete announcement at this stage.

Bessent also recalls that the foundation of the American bitcoin reserve currently consists exclusively of BTC seized during legal proceedings, an approach that does not mobilize public funds.

Slow execution and growing skepticism

Despite Bessent’s clarification, skepticism is setting in. The crypto community is growing impatient with a strategy that seems stalled since the executive order signed by Donald Trump last March 6, establishing the Strategic Bitcoin Reserve and a Digital Asset Stockpile.

The president then paved the way for budget-neutral BTC purchases, excluding any impact on public finances. However, despite five months of consideration, no concrete plan has been revealed. Senator Cynthia Lummis reminded that Congress must approve any direct acquisition, which could explain the Treasury’s caution.

.@SecScottBessent is right: a budget-neutral path to building SBR is the way. We cannot save our country from $37T debt by purchasing more bitcoin, but we can revalue Gold reserves to today’s prices & transfer the increase in value to build SBR.

America needs the BITCOIN Act.

The latest publication of the Digital Asset Working Group, highly anticipated, did not provide a clear answer on the purchase modalities. Among the avenues discussed are a revaluation of gold certificates or the use of customs revenues, but these hypotheses remain theoretical and without a timeline for implementation.

Bessent’s lukewarm response was not enough to reassure sector players. Eli Nagar, CEO of mining company Braiins, reacted strongly : “are you seriously still exploring budget-neutral solutions? At some point, exploring without executing looks like avoidance. Come on, get moving!”.

Are you seriously still “exploring budget-neutral pathways”? At some point, exploration without execution starts to look like avoidance.

Come on, get moving! https://t.co/YbyXJbVuaW

Max Keiser, Bitcoin advisor for El Salvador, mocked the recurring use of the word “exploration” by the US authorities.

“Exploring” 🤣😂😅 https://t.co/rIY6ilh4u7

These criticisms reflect a deeper unease. While several states are advancing rapidly in their bitcoin strategy, the United States seems to be stagnating. The possibility of being overtaken in this strategic field is becoming a growing concern.

Despite the absence of additional purchases, Bessent confirmed that the government WOULD stop selling its current bitcoin reserves. He estimates their value between $15 and $20 billion. According to BitBo dashboard data, the United States holds 198,012 BTC, valued at $23.5 billion at current prices. While this decision to hold BTC can be perceived as a positive signal, it does not compensate for the lack of clear vision on future purchases.

Such a sequence highlights the vital importance of clear and consistent communication from the US authorities on crypto issues. As long as the acquisition strategy remains unclear, the United States risks losing the strategic advantage it claims. It remains to be seen whether Congress will play a facilitating role, as was the case for the vote on the Genius Act, or whether it will continue to fuel institutional inertia.

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