US Treasury Eyes Budget-Neutral Bitcoin Reserve Expansion
US Treasury Secretary Scott Bessent has softened his stance on expanding the Strategic Bitcoin Reserve. Established under President Trump’s March executive order with $15–$20 billion in seized BTC, the reserve may grow through budget-neutral acquisitions. Treasury will reallocate existing funds and use forfeited assets to increase the Bitcoin reserve without new taxpayer costs or congressional approval. Officials including White House crypto advisor David Sacks and Commerce Secretary Howard Lutnick are balancing fiscal discipline with making the US a global Bitcoin superpower.
The announcement sent BTC prices tumbling from about $124,000 to $119,000, erasing over $50 billion in market value in minutes. Traders should brace for short-term volatility as the US Treasury’s buying plans unfold. Long term, a larger Bitcoin reserve could bolster liquidity and support market confidence. Meanwhile, Indonesia and Brazil are exploring Bitcoin reserves to hedge inflation and diversify from the US dollar.
Bearish
In the short term, the announcement prompted a swift sell-off, with BTC prices falling from around $124,000 to $119,000 as traders reacted to uncertainty over purchase timing and volume. This reflects bearish sentiment due to market volatility. However, the prospect of a larger strategic reserve financed without new taxpayer costs could support Bitcoin’s liquidity and market confidence over the long term. Nevertheless, the immediate price impact leans bearish.