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Bitcoin plunged after US Treasury Secretary Scott Bessent ruled out government purchases for the Strategic Bitcoin Reserve, sparking over $1 billion in crypto liquidations—and then he backtracked.
During a Fox Business interview, Bessent initially said the Treasury would not be buying Bitcoin for its strategic reserve, sending Bitcoin to a 24-hour low of $117,254.
“We’ve also started to get into the 21st century, a Bitcoin reserve,” Bessent said during an interview with Fox Business. “We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up.”
Long positions on Bitcoin and Ethereum were hit hardest, wiping out more than $500 million combined.
Sentiment was already vulnerable after a hotter-than-expected Producer Price Index (PPI) inflation. Wholesale prices soared 0.9% in July, far above analyst estimates, sparking fears that a potential interest rate cut would be postponed.
Then came Bessent’s clarification on X
“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,’” he said, sending Bitcoin back above $119k.
Bitcoin that has been finally forfeited to the federal government will be the foundation of the Strategic Bitcoin Reserve that President Trump established in his March Executive Order.
In addition, Treasury is committed to exploring budget-neutral pathways to acquire more…
— Treasury Secretary Scott Bessent (@SecScottBessent) August 14, 2025
Senator Cynthia Lummis, an advocate for the Strategic Bitcoin Reserve, backed Bessent’s clarification, proposing that the US could revalue its gold reserves to fund further Bitcoin accumulation.
“We cannot save our country from $37T debt by purchasing more bitcoin, but we can revalue gold reserves to today’s prices & transfer the increase in value to build SBR,” she said.
Bitcoin critic Peter Schiff pushed back, warning that such a move could require printing more dollars, potentially fueling inflation.
“There is no increased value,” he said on X. “The extra money would have to be printed into existence by the Fed. We don’t need to create more inflation to buy Bitcoin.”
Bitcoin Down Over 2%
Bitcoin was able to recover slightly after dipping to a 24-hour low of $117,254.88, and trades at $118,796.35 as of 1:50 a.m., data from CoinMarketCap shows.
Despite the rebound, the leading crypto is still down more than 2% in the last 24 hours. It has also fallen over 4% since setting its new ATH at $124,457.12 just yesterday.
Bitcoin price chart (Source: CoinMarketCap)
The lion’s share of the $1 billion in liquidations were from long positions, with over $850 million being wiped out from these bullish bets, according to CoinGlass.
Long positions for crypto market leader BTC and Ethereum (ETH) took the biggest knock. The CoinGlass data shows that around $344.22 million got liquidated from ETH longs, while $171.96 million got wiped out from bullish bets for BTC.
Sentiment in the crypto market also took a substantial knock, as shown by the 15-point drop the Crypto Fear and Greed Index experienced in the last 24 hours.
Currently at a “Greed” score of 60, the index has reached levels last seen at the beginning of the month when there was uncertainty around Trump’s tariff deadline for trade partners and the potential ramifications.
The rest of the top 10 largest cryptos by market cap also remain in the red on the 24-hour time frame. XRP’s gains from the conclusion of Ripple’s yearslong lawsuit with the Securities and Exchange Commission (SEC) were slashed, with the altcoin now down over 3%.
Binance Coin (BNB) is in the red by a fraction of a percentage, but is still up more than 8% on the longer-term weekly time frame after recently achieving a new ATH as well.
Meanwhile, Solana (SOL), Dogecoin (DOGE), TRON (TRX) and Cardano (ADA) are down 3%, 5%, 2% and 2%, respectively.
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