Bitcoin News Today: "Bitcoin's Price Plunge Linked to U.S. Treasury's Strategic Stand"

The U.S. Treasury’s decision to halt new Bitcoin purchases has sparked speculation about its potential market impact, with some analysts suggesting the move could have triggered a $120 billion drop in Bitcoin’s valuation. As of August 20, 2025, Bitcoin was trading at $113,972.57, slightly lower than its recent all-time high of $124,590, while Ethereum remained stable at $4,218.23. The market is currently navigating key support levels, with traders watching for signs of a rebound or further decline.

On August 14, Treasury Secretary Scott Bessent reiterated that the government would not acquire additional Bitcoin for its strategic reserve, which is composed entirely of seized digital assets. The reserve, established by President Donald Trump in March 2025 through an executive order, is modeled after traditional strategic reserves but remains unique in its focus on Bitcoin. Bessent confirmed that the government would continue to expand the reserve through asset seizures but would not use taxpayer funds to purchase new BTC. According to Bitbo’s estimates, the U.S. government holds approximately 198,012 BTC, valued at around $23.6 billion as of December 2024. The majority of these assets—94,643 BTC—were seized from individuals involved in the 2016 Bitfinex hack.

The U.S. Department of Justice (DOJ) has continued to expand the reserve by seizing digital assets linked to cybercrime. In August 2025, the DOJ unsealed warrants authorizing the seizure of over $2.8 million in digital assets from a wallet controlled by Ianis Aleksandrovich Antropenko, a suspect in a ransomware scheme involving the Zeppelin malware. While the DOJ did not specify how much of the seized assets would go to victims and how much would remain with the government, it emphasized that the funds were proceeds from “unlawful activity.” Earlier in July, the DOJ had also filed a lawsuit to claim $2.4 million BTC tied to the Chaos ransomware group. These seizures contribute to the growing strategic reserve while also serving as a deterrent to cybercriminal activity.

The Treasury’s decision to stop purchasing Bitcoin aligns with the executive order’s mandate that the reserve be capitalized solely through forfeited assets from criminal or civil proceedings. The order also established a U.S. Digital Asset Stockpile, a broader repository for digital assets beyond Bitcoin, but clarified that no additional assets would be acquired with public funds. While the Treasury has expressed interest in exploring “budget-neutral” methods to expand the reserve, no concrete strategies have been announced. Bessent indicated that the Treasury remains committed to identifying such pathways but provided no immediate details on how they might be implemented.

Market reactions to the Treasury’s stance have been mixed. Some investors have taken the halt in Bitcoin purchases as a signal of regulatory caution, contributing to a broader sell-off in crypto markets. In the past 24 hours, over 120,000 traders were liquidated, and spot Bitcoin ETFs saw net outflows of $523.3 million, according to Coinglass data. Analysts like Willy Woo have attributed the recent volatility to a “liquidation-driven shakeout” following a sharp price drop from $124,590 to $112,500. However, others remain optimistic, with crypto trader Jelle noting that Bitcoin had cleared most liquidity pockets and could rebound to $118,000 if it reclaims the level. Ethereum, meanwhile, is seen as a potential “buy-the-dip” opportunity, with several analysts expecting a short-term bounce to $4,340 if it holds key support levels.

The broader regulatory landscape for Bitcoin continues to evolve, with the Treasury’s actions signaling a cautious approach. While the government has taken steps to strengthen its digital asset holdings through seizures and enforcement actions, it has not embraced large-scale public investment. This approach reflects a balance between treating Bitcoin as a strategic asset and maintaining fiscal responsibility. As the market adjusts to these developments, the focus will likely shift to how the U.S. manages its existing Bitcoin stockpile and whether it can expand it without relying on new purchases.

Source: [1] US Treasury confirms Bitcoin Reserve will rely on seizures (https://coingeek.com/us-treasury-confirms-bitcoin-reserve-will-rely-on-seizures/) [2] Trump Media's $2 Billion Bitcoin Purchase Creates Stock Surge (https://finance.yahoo.com/news/trump-media-2-billion-bitcoin-110547590.html) [3] Bitcoin Holds $113,000 As Ethereum, XRP, Dogecoin Dip (https://finance.yahoo.com/news/bitcoin-holds-113-000-ethereum-122948500.html) [4] Bitcoin, Ethereum Bounce To $114000 And $4300 (https://www.benzinga.com/crypto/cryptocurrency/25/08/47241426/bitcoin-ethereum-bounce-to-114000-and-4300-was-this-the-dip) [5] Treasury Sanctions Cryptocurrency Exchange and Network (https://home.treasury.gov/news/press-releases/sb0225) [6] US Will Not Be Purchasing Any Bitcoin, Treasury Secretary (https://finance.yahoo.com/news/us-not-purchasing-bitcoin-treasury-144840011.html) [7] American Bitcoin Plans Asia Deal to Grow BTC Reserves (https://cointelegraph.com/news/trump-linked-american-bitcoin-asia-acquisitions-btc)