US Government’s Bitcoin Policy Aims to Reduce Market Volatility

The US government will continue to hold Bitcoin obtained from asset seizures, Treasury Secretary Scott Bessent told lawmakers in a congressional hearing. This marks a shift from past practices when the government quickly sold seized crypto, sometimes putting pressure on market prices.

Bessent emphasized that the government’s approach is now long-term. “We will retain seized Bitcoin as a strategic holding,” he said. The plan aims to prevent sudden sell-offs that could impact investors and market stability.

No Pressure on Private Banks

Bessent also clarified that the government can’t force private banks to buy Bitcoin, especially during market downturns. The Treasury wants to maintain market independence and avoid interfering with crypto price movements. This approach highlights a careful balance between federal oversight and free-market principles.

The policy reflects lessons learned from previous auctions, which sometimes caused volatility in the crypto markets. By holding onto seized Bitcoin, the government aims to reduce unnecessary market swings and give investors more confidence in stability.

US Market Reaction

Following Bessent’s announcement, Bitcoin’s price dipped about 2%, trading near $73,000. Analysts say the modest decline shows that investors are cautious but relieved that the government is reducing the risk of large sell-offs.

Experts note that holding Bitcoin could also signal long-term confidence in the cryptocurrency. By keeping the digital asset, the US government demonstrates that it views Bitcoin as a valuable property to manage strategically rather than a short-term revenue source.

Implications for the US Crypto Markets

This policy may have broader effects on how institutional and retail investors view Bitcoin. With less pressure from government auctions, the market may experience smoother price movements during periods of volatility.

At the same time, the announcement reinforces that the US government will act responsibly with seized crypto assets. It shows a move toward thoughtful asset management rather than quick liquidation, which has sometimes destabilized prices in the past.

Overall, Bessent’s testimony highlights a measured, long-term approach to handling Bitcoin seizures. The government’s strategy may help stabilize the market and reassure investors while maintaining respect for private sector independence.

As the cryptocurrency market continues to evolve, observers will be watching closely to see how government-held Bitcoin affects price trends and investor behavior in the months ahead.