The cryptocurrency market experienced significant losses following the U.S. Treasury's decision to halt Bitcoin purchases and its reserve policy changes.
Changes in Treasury Policy
The U.S. Treasury announced a halt to Bitcoin purchases, leading to a $120 billion decline in market capitalization. Treasury Secretary Scott Bessent stated, "The government will no longer acquire Bitcoin and will rely on asset seizures to manage its crypto reserves."
Market Dynamics
After reaching new all-time highs, Bitcoin led the market decline. This affected investor sentiment and liquidity, while Ethereum remained relatively stable. The financial impact included over $1 billion in leveraged liquidations.
Outlook for Crypto Market
Experts indicate that despite short-term volatility, Bitcoin’s long-term fundamentals remain strong. The shift in the Treasury's approach to BTC reserves underscores the market's influence on national financial stability.
The U.S. Treasury's policy changes highlight the cryptocurrency market's sensitivity to regulatory developments, creating a new level of uncertainty and significant market capitalization declines.
