The price of Bitcoin took a significant hit on October 12 after U.S. Treasury Secretary Scott Bessent confirmed that the government would not be buying cryptocurrency for its strategic reserve.
Bitcoin Price Drop
At 12:35 UTC, Bitcoin's price fell to an intraday low of $117,719 on the Bitstamp exchange. Currently, it is trying to recover, trading at $118,544. The cryptocurrency is down nearly 4% on the same day it reached a new all-time high of $124,517.
Liquidations in the Crypto Market
Altcoins experienced even larger losses, with XRP plunging by 7%, briefly dipping below the $3 mark. Overall, over $1 billion worth of crypto was liquidated in the past 24 hours, with long positions accounting for the majority of this wipeout at $778 million.
U.S. Cryptocurrency Reserves
Bessent stated that the U.S. will stop selling existing coins, which has been the policy of the current administration since the establishment of the cryptocurrency reserve in March. However, he has now explicitly ruled out new Bitcoin purchases after previously suggesting that some avenues could be found. On Polymarket, the odds of the U.S. establishing its own strategic Bitcoin reserve in 2025 have now collapsed to just 16%, a new all-time low. The government's holdings of confiscated coins are currently worth up to $20 billion.
Recent statements by the U.S. Treasury Secretary have had a significant impact on the cryptocurrency market, reflected in the sharp price drops of Bitcoin and other digital assets. The market has incurred substantial losses in a short period.
