Bitcoin Crashes 8% as Treasury Secretary Rules Out Government Support

Markets Tumble as Crypto Dreams Meet Reality

A brutal selloff swept through global markets Thursday as Bitcoin crashed to about $69,000, down 8% from previous levels , while South Korea's Kospi plummeted 3.9% to 5,163.57 . The cryptocurrency's decline marked its lowest level since November 2024 , sending shockwaves through technology stocks across Asia and beyond.

Samsung Electronics, South Korea's biggest company, lost 5.9% while chip maker SK Hynix plunged 6.7% . The tech rout wasn't confined to Asia. The S&P 500 fell 0.5% for its fifth modest loss in the last six days, while the Nasdaq composite sank 1.5% .

What triggered this sudden market panic? A single comment from Treasury Secretary Scott Bessent that shattered crypto investors' hopes of government backing.

Treasury Secretary's Blunt Reality Check

During a heated House Financial Services Committee hearing Wednesday, Bessent was asked if the US Treasury had the authority to buy bitcoin or other cryptos. "I do not have the authority to do that, and as chair of FSOC, I do not have that authority," Bessent stated .

The exchange grew more pointed when Representative Brad Sherman pressed whether the government could essentially "bail out" Bitcoin during a crisis. Sherman clarified that by "bail out," he meant if the Treasury Department can ask U.S. banks to buy Bitcoin or alter their reserve regulations to accommodate the leading cryptocurrency. Bessent rejected that notion. He said that neither his role as Treasury Secretary nor his position as FSOC chair allows such action .

He also added that he doesn't have the authority to purchase Bitcoin using taxpayer dollars on behalf of the government. "I don't have the authority to buy Bitcoin with tax dollars," Bessent said . The only Bitcoin the government holds comes from law enforcement seizures .

Global Ripple Effects Hit Tech Stocks

The crypto crash triggered a broader technology selloff that rippled across continents. Advanced Micro Devices dropped 17.3% even though the chip company reported a stronger profit for the latest quarter than analysts expected . Meanwhile, Qualcomm fell 8.5% for one of the market's bigger losses even though the chip company topped analysts' expectations for profit and revenue in the latest quarter. Its forecast for profit in the current quarter fell short of analysts' expectations as an industrywide shortage of memory pushes some handset makers to cut back on orders .

European markets also felt the pressure. Germany's DAX slipped 0.2% to 24,568.67 and the CAC 40 in Paris edged 0.2% higher to 8,278.99. Britain's FTSE 100 gave up 0.3% to 10,371.83 . Oil prices sank more than $1 a barrel , adding to the market's woes.

What This Means for Investors

Bessent's testimony delivered a sobering reality check to crypto enthusiasts who had hoped for government intervention during market downturns. For critics of digital currencies, Bessent's testimony offered reassurance that public funds would not be risked. For proponents, it provided a sobering reminder that bitcoin's market will remain subject to organic supply and demand, without a federal backstop .

The market's reaction reveals how much crypto prices had been inflated by speculation about potential government support. Bitcoin sank to roughly half its record price, giving back all it gained since U.S. President Donald Trump won the White House for his second term . That's down from a record of above $124,000 in October .

While the Trump administration has established a Strategic Bitcoin Reserve for seized assets, Bessent made clear this doesn't extend to market intervention. Investors must now navigate crypto markets knowing they're truly on their own, with no safety net from Washington waiting to catch them if they fall.