- Bitcoin reached an all-time high of US$124,457 on Thursday before experiencing a sharp 5% drop to US$117,477 within hours on Friday morning.
- The price correction occurred after US Treasury Secretary Scott Bessent stated in a CNBC interview that America wouldn’t purchase Bitcoin for its strategic treasury.
- Crypto commentators criticised the federal stance as “manipulation”, with analyst Jacob King suggesting the administration was backpedalling on earlier commitments.
- Industry experts believe government adoption remains crucial for Bitcoin’s institutional growth, with potential rate cuts and dollar weakness potentially driving future adoption.
After hitting a record US$124,457 (AU$191,423) on Thursday, Bitcoin tumbled early Friday to US$117,477 (AU$180,693), according to CoinMarketCap data – a 5% drop in just a few hours. The largest cryptocurrency later pared losses, trading at US$119,226 (AU$183,384), still up 2% on the week.
The pullback coincided with an interview on CNBC in which US Treasury Secretary Scott Bessent said the government would not purchase Bitcoin for its strategic reserves. Although this echoed previous remarks – officials have said they would seek “budget-neutral” ways to add BTC – the reiteration disappointed crypto investors.
The dip appeared to prompt a follow-up statement from Bessent: “Treasury is committed to exploring budget-neutral pathways for acquiring more Bitcoin to expand the reserve,” he said, adding that the goal remains to “execute on the President’s promise to make the United States the ‘Bitcoin superpower of the world’.”
Jacob King, a prominent crypto commentator with over 500k followers on Crypto Twitter, dismissed the move as “manipulation”, arguing that “the government doesn’t give a damn about Bitcoin”.
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He accused the government of backpedalling, suggesting that “someone in the administration or a major donor clearly whispered in his ear after that interview to soften the market blow”.
Governments ‘Missing Link’ in Bitcoin Adoption
Matt Hougan, Chief Investment Officer at Bitwise, said governments remain the missing link in Bitcoin’s institutional adoption. While ETFs and corporates have been active buyers, governments have lagged, he said. The US stance not to accumulate BTC appears at odds with the idea of holding it in public coffers.
Hougan predicts that by year-end some governments will begin adding Bitcoin to their treasuries, potentially driving prices higher. Potential rate cuts, a weaker dollar and money printing could further fuel Bitcoin adoption and cement its status alongside gold as a safe-haven asset.
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