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The cryptocurrency market has been delivered a shock after US Treasury Secretary Scott Bessent said the government doesn’t plan to buy Bitcoin.
In an interview with Fox Business, Bessant has touched on the topic of the Strategic Bitcoin Reserve and has confirmed that the government will not be buying more of the cryptocurrency for it. Instead, he said, the US will build it up using confiscated assets.
At current prices, these assets are worth between $15 to $20 billion. The US Treasury Secretary has also revealed that the government is going to stop selling its BTC holdings.
The market has reacted negatively to the news, with Bitcoin going to as low as $118,000. The asset was already chaotic during the past day, with its price first setting a new all-time high (ATH) above $124,000 and then facing a sharp retrace, so the announcement has only added to the chaos.
This latest volatility in the cryptocurrency sector has meant that a significant amount of derivatives traders have found liquidation, according to data from CoinGlass.
As displayed in the table, liquidations across the market have totaled to nearly $1 billion in the last 24 hours. As Bitcoin and other assets have declined in this window, it’s not surprising to see that longs took the brunt of the derivatives flush, with $747 million in positions being forcibly closed off.
In terms of the individual tokens, Ethereum-related contracts led the liquidations at $312 million. Bitcoin came second with $214 million in contracts.
ETH coming on top is likely down to the fact that the asset has been getting all the attention lately, with its price rallying close to its ATH. Altcoins like Solana (SOL) and XRP (XRP) have also seen significant liquidations of $66 million and $56 million, respectively.
While the US may not be planning to acquire Bitcoin itself, President Donald Trump has been moving to establish the country as the “crypto capital of the world.” The President’s Working Group earlier released a Digital Assets Report, giving recommendations related to cryptocurrency policy.
Federal agencies have already begun working to realize Trump’s vision, like the Securities and Exchange Commission (SEC) with its Project Crypto and the CFTC with its Crypto Sprint.
At the time of writing, Bitcoin is trading around $118,200, down more than 2% over the past day.
