US Treasury Eyes Bitcoin Reserve Expansion Amid Mixed Signals
Government plans for a strategic bitcoin reserve saw a confusing shift on Thursday, with initial statements ruling out new purchases followed by a commitment to explore them.
What’s the latest on the U.S. strategic bitcoin reserve? U.S. Treasury Secretary Scott Bessent initially announced Thursday that the reserve would consist of the $15 billion to $20 billion the government already holds, with no plans for new acquisitions. However, later in the day, Bessent stated his department is “committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve.”
The foundation of this reserve will be tokens already forfeited to the government. President Donald Trump signed an executive order in March to establish this strategic bitcoin reserve, a concept Bessent has championed. This development comes shortly after Bo Hines, who led the White House’s Council of Advisors on Digital Assets and was involved with the strategic reserve, departed his position earlier this month.
- The U.S. Treasury initially stated no new bitcoin would be purchased for the strategic reserve.
- Later, Secretary Bessent signaled an openness to “budget-neutral pathways” for acquiring more bitcoin.
- The reserve will primarily be built on forfeited bitcoin.
- President Trump signed an executive order in March to create the reserve.
Bitcoin was trading around $118,000 late Thursday afternoon. This was a notable dip from its new record high of $124,000 reached just hours earlier. The sharp decline in bitcoin’s price occurred after a surprisingly strong Producer Price Index report. This economic data raised doubts about the Federal Reserve’s potential to lower interest rates in September.
Why did bitcoin prices fall? The unexpected strength in the U.S. Producer Price Index report, released on Thursday, spooked investors. It cast a shadow over the likelihood of the Federal Reserve cutting interest rates soon, a move that often benefits riskier assets like bitcoin.
