‘Bail Out Bitcoin?’: Treasury Secretary Dismisses Federal Rescue for Crypto in Heated Congressional Hearing
WASHINGTON—In a hearing that veered from the technical to the theatrical, U.S. Treasury Secretary Scott Bessent firmly shut the door on any notion of a federal bailout for Bitcoin or its investors, reinforcing the stark divide between the crypto ecosystem and the government-backed traditional financial system.
The pointed questioning came from Rep. Brad Sherman (D-CA) during a session of the House Financial Services Committee. Against a backdrop of a slumping crypto market—Bitcoin is down more than 40% from its record high—Sherman probed whether the administration would consider directing banks to buy Bitcoin or using public funds to prop up its price.
"I need to understand the premise," Bessent responded, pausing for clarification. "Are you asking if the Treasury would use taxpayer dollars to intervene in the Bitcoin market?" Upon confirmation, his answer was unequivocal: "No. The federal government does not backstop speculative digital assets."
The moment highlighted a core tension in Washington's approach to cryptocurrency: how to grapple with a multi-trillion dollar market that operates largely outside the established frameworks of federal support and lender-of-last-resort functions.
Analysts note that the Secretary's remarks, while expected, served as a cold reminder to the market. Bitcoin extended losses during the session, shedding about 3% intraday. "It removes a phantom safety net that some speculative traders might have imagined," said Lina Chen, a market strategist at FinTech Analytics Group. "This reaffirmation of ‘no bailout’ reinforces that crypto volatility is solely borne by investors."
However, Bessent did acknowledge one area of direct government exposure: seized assets. The Treasury Department holds significant quantities of Bitcoin confiscated from criminal enterprises, a stockpile whose value has fluctuated wildly with the market.
The hearing later descended into political sparring. Rep. Gregory Meeks (D-NY) challenged Bessent on whether a crypto firm linked to former President Donald Trump would receive preferential regulatory treatment, leading to a sharp exchange and requiring the committee chair to call for order.
Beyond crypto, Bessent outlined the administration's broader economic priorities, championing the "parallel prosperity" agenda and defending tariff policies aimed at protecting U.S. industries.
Reactions & Analysis:
Marcus Thorne, Chief Investment Officer at Oakcrest Capital: "This hearing was symbolic. The question wasn't serious, but the answer was critical. It draws a clear regulatory perimeter. For institutional adoption to mature, clarity—even if it's clarity that there's no backstop—is preferable to ambiguity."
Dr. Anya Petrova, Blockchain Researcher at Carter University: "The ‘bailout’ question, while odd, reveals a fundamental misunderstanding among some policymakers. Bitcoin was engineered to be sovereign. Seeking a federal bailout is antithetical to its entire purpose. The real discussion should be about clear rules for custody and exchange operations, not price support."
Derek Vance, host of the ‘Crypto Unchained’ podcast: "It's absolute hypocrisy! They'll seize our Bitcoin, hold it on their balance sheet, and profit from its appreciation, but offer zero protection to everyday investors when the market tanks. This just proves the system is designed to keep power centralized. They fear what they can't control."
Sarah El-Masri, former SEC advisor and fintech attorney: "The theatrics overshadow the substantive point. The Treasury's position is legally and practically sound. It should halt any irresponsible speculation that crypto is somehow implicitly guaranteed. The focus now must be on legislating a coherent market structure to protect consumers without moral hazard."
The takeaway for the digital asset industry is clear: while its integration into the financial landscape continues, it will travel a path distinct from traditional finance, without federal lifelines to cushion its falls.