08/16 update below. This post was originally published on August 15
Bitcoin has plummeted after soaring to a fresh all-time high this week, with the combined crypto market losing well over $100 billion despite Elon Musk quietly signalling his support.
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The bitcoin price, which has doubled since this time last year, fell by 5% as traders brace for a September shock following U.S. president Donald Trump dropping a $12.2 trillion bombshell.
Bitcoin’s bearish reversal comes as U.S. Treasury Secretary Scott Bessent revealed the U.S. holds far fewer bitcoin than previously thought, putting the value of the U.S. government’s at “$15 billion to $20 billion”—well below estimates of more than $23 billion.
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Treasury secretary Scott Bessent revealed the U.S. holds $15 billion to $20 billion bitcoin—far less than the $23 billion some believed—with his comments on future bitcoin-buys worsening a bitcoin price sell-off.
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The figure was used as Bessent appeared to rule out the U.S. buying additional bitcoin for the bitcoin strategic reserve promised by president Donald Trump during what seemed to be off-the-cuff remarks during an interview with Fox Business.
“We’ve also started—to get into the 21st Century—a bitcoin strategic reserve. We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up. We’re going to stop selling that,” Bessent said, following a question about the U.S. gold reserves, adding: “I believe that bitcoin reserve is at today’s prices somewhere between $15 and $20 billion.”
Estimates for how much bitcoin the U.S. government holds have been put at around $23 billion by various sources, including Arkham Intelligence, which reckons the U.S. is sitting on almost 200,000 bitcoin.
Following the interview, Bessent sought to clarify his comments on X, saying, “Treasury is committed to exploring budget-neutral pathways to acquire more bitcoin to expand the reserve, and to execute on the president’s promise to make the United States the ‘bitcoin superpower of the world,'” and calling the “bitcoin that has been finally forfeited to the federal government … the foundation of the strategic bitcoin reserve that president Trump established in his March executive order.”
08/16 update: Treasury secretary Scott Bessent has said the Federal Reserve could cut interest rates by 50 basis points in September, mirroring a surprise 2024 interest rate cut that powered a bitcoin price boom into the November election.
“If we’d seen those numbers in May, in June, I suspect we could have had rate cuts in June and July. So that tells me that there’s a very good chance of a 50 basis-point rate cut,” in September,” Bessent told Bloomberg.
“Rates are too constrictive. We should probably be 150 to 175 basis points lower,” Bessent said, adding to U.S. president Donald Trump’s war of words against the Fed and chair Jerome Powell.
The crypto market surged this week after the latest U.S. inflation data gave the Federal Reserve a green light to cut interest rates in September, with markets now pricing in a 92% likelihood of a 25 basis cut, according to CME’s FedWatch.
A higher than expected producer price index reading wasn’t enough to discourage traders from betting on an interest rate cut in September—with the resumption of the Fed’s interest rate cutting cycle after a tariff-induced pause widely expected to support risk assets like bitcoin and cryptocurrencies.
“Adding momentum, macro conditions remain highly supportive, with U.S. equities hovering near record highs and the Federal Reserve expected to begin rate cuts in September,” Thomas Perfumo, global economist at the bitcoin and crypto exchange Kraken, said in emailed comments.
White House crypto czar David Sacks has said Bessent and Commerce secretary Howard Lutnick, an outspoken bitcoin bull, will have final say on whether to purchase additional bitcoin via “budget-neutral” methods, such as selling off other government reserve assets such as gold.
The bitcoin reserve and a broader crypto stockpile were ordered by Trump this year following a campaign promise first made during the Bitcoin 2024 conference.
Trump’s order instructed his crypto task force to explore how the reserve and stockpile would be funded, though a hotly anticipated report earlier this month failed to present any ideas, with the report’s primary author Bo Hines, who headed Trump’s council of advisers on digital assets, leaving his post shortly after publication.
Bitcoin and crypto supporting senator Cynthia Lummis has said the Trump administration’s priority is for the now passed Genius Act stablecoin bill and a crypto market structure bill that’s still making its way though Congress, with the White House not going to look to the bitcoin reserve until they’ve both been passed.
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The bitcoin price has doubled over the last year, soaring in large part due to U.S. president Donald Trump’s commitment to creating a bitcoin strategic reserve.
Forbes Digital Assets
Earlier this year, the bitcoin price and crypto market was spooked by reports the U.S. could hold just 30,000 bitcoin—something Bessent’s comments seem to refute.
The U.S. Marshals Service was revealed in July to hold fewer bitcoin than previously thought, according to a Freedom of Information Act (FOIA) request filed by pseudonymous crypto journalist L0la L33tz, raising questions over how much bitcoin the U.S. government holds and whether some of the bitcoin was quietly sold off.
“I’m alarmed by reports that the U.S. has sold off over 80% of its bitcoin reserves—leaving just ~29,000 coins,” senator Cynthia Lummis, a bitcoin supporter who has championed the creation of a U.S. strategic bitcoin reserve, posted to X. “If true, this is a total strategic blunder and sets the United States back years in the bitcoin race.”
If the U.S. does only hold less than 30,000 bitcoin, it would bump it down to fourth in the global rankings, behind China (194,000 bitcoin), the U.K. (61,000), Ukraine (46,000) and ahead of Bhutan with 13,000 bitcoin.