The price of Bitcoin, the leading cryptocurrency by market capitalization, experienced a sharp collapse earlier this Thursday. This significant downturn followed a confirmation from U.S. Treasury Secretary Scott Bessent that the U.S. would not be purchasing crypto for its strategic reserve. The leading cryptocurrency plunged to an intraday low of $117,719 on the Bitstamp exchange at 12:35 UTC, struggling to regain ground and trading around $118,544. This occurred on the very same day Bitcoin had reached a new all-time high of $124,517, marking a nearly 4% decline.

The impact extended beyond Bitcoin, with altcoins taking an even bigger hit; for instance, XRP plunged by 7% within minutes, briefly dipping below the $3 level. Overall, CoinGlass data indicated that more than $1 billion worth of crypto had been liquidated over the past 24 hours, with long positions accounting for the overwhelming majority of this wipeout, totaling $778 million.

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Bessent’s initial statement clarified that while the U.S. would stop selling existing coins, a policy in place since the establishment of the cryptocurrency reserve in March, he explicitly ruled out new Bitcoin purchases. This stance contradicted his previous suggestions that avenues for buying more could be found. Consequently, on Polymarket, a major cryptocurrency-based betting platform, the odds of the U.S. establishing its own strategic Bitcoin reserve in 2025 collapsed to a new all-time low of just 16%.

Regarding the government's current holdings, Bessent clarified that these, comprised of confiscated coins, currently stand at up to $20 billion, making the U.S. the largest holder of top cryptocurrencies among all countries. BitTBOdata also indicated that China and the U.K. were among the top three holders. However, it was reported that China was considering selling its vast Bitcoin holdings to help fill a budget deficit for its current Labour Party government.

However, adding a layer of complexity and confusion to the market, Treasury Secretary Scott Bessent subsequently walked back his earlier comments, suggesting that the U.S. might actually buy more Bitcoin. This contradictory social media post puzzled many members of the cryptocurrency community. While Bessent had previously ruled out additional BTC purchases beyond the forfeited coins already held by the U.S. government, a comment made during an interview with Fox Business, his latest post on X claimed that the U.S. Treasury was committed to finding “budget-neutral” pathways for acquiring more coins. This latest statement echoed comments he had made back in March.

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U.Today previously reported that Bloomberg had estimated a 30% chance of the U.S. actually buying Bitcoin in 2025, with funds for such purchases potentially sourced from the Exchange Stabilization Fund (ESF). This potential for new purchases, contrasted with the earlier definitive rejection, fueled market uncertainty and renewed volatility.

Following Bessent's most recent social media post, Bitcoin was trading around $118,156. The day had already seen significant price swings, with Bitcoin hitting an intraday low of $117,201 on the Bitstamp exchange after reaching a new all-time high of $124,517 earlier. Despite this rollercoaster of events and the recent plunge, Michael Saylor, the executive chairman of Strategy (formerly MicroStrategy), remained unfazed, succinctly stating on social media that “volatility is the gift to the faithful.”