The cryptocurrency market has seen a major drop with nearly $1 billion in investments liquidated in 24 hours, after US Treasury Secretary Scott Bessent gave an update on the future of the government’s Bitcoin holdings.
According to Coinglass data, total liquidity over the past day reached about $961 million, with the worst-hit positions. Of that, $821 million came from contracts as Bitcoin and other major cryptocurrencies declined. Ethereum-related contracts contributed the most liquidity at $342 million, followed by Bitcoin at $162 million. Solana and XRP also saw big losses with $61 million and $55 million in liquidations, respectively.
Analysts attributed Ethereum’s dominance in liquidity to its recent surge to near all-time highs. The drop came after Bessent stated that the US government has no plans to buy more Bitcoin. However, he later issued a contradictory statement suggesting otherwise.
This mixed statement is seen as contradicting the government’s strategy following President Trump’s March 2025 executive order establishing the Strategic Bitcoin Reserve. Former Executive Director of the US President’s Digital Asset Advisory Council, Bo Hines, has previously called for an aggressive accumulation of Bitcoin through a budget-neutral strategy.
Bessent previously confirmed that the Treasury would not be making additional purchases of Bitcoin for the Strategic Reserve, but rather that the reserve would be expanded through assets seized from criminal and law enforcement actions. He also revealed that the government would be halting all Bitcoin sales, a major change from the previous administration’s practice of selling billions of dollars in BTC. This move is seen as likely to reduce selling pressure and support Bitcoin’s price in the long term.
However, the immediate market reaction was negative. BTC briefly fell below $120,000 after hitting a record high of over $124,000 earlier in the day. Shortly after, Bessent reiterated that the US Treasury is committed to exploring a budget-neutral method of expanding the reserve, in line with Trump’s vision of making the US the “Bitcoin superpower of the world.” He also touched on other asset management strategies, including the US gold reserves of 261.5 million ounces, which are officially valued at $42.22 per ounce in 1973 standards.
With the US holding one of the world’s largest Bitcoin reserves, supply pressure on BTC could ease in the medium term. However, combined with the large liquidity outflows that day, this policy change demonstrates how sensitive the crypto market is to decisions at the highest levels of government.
