Bitcoin Tumbles Below $70K as Treasury Chief Rules Out Bailout, Adding to Crypto Market Jitters
Bitcoin (BTC-USD) breached the psychologically significant $70,000 level on Thursday, extending losses triggered by U.S. Treasury Secretary Scott Bessent's firm stance against federal intervention to stabilize the crypto market.
The sell-off gained momentum after Secretary Bessent, testifying before the House Financial Services Committee on Wednesday, was pressed on whether the Treasury could step in to purchase bitcoin or other digital assets during a crisis. "I do not have the authority to do that, and as chair of the Financial Stability Oversight Council (FSOC), I do not have that authority," Bessent stated unequivocally. His comments effectively removed a perceived safety net for investors who had speculated about potential government backstops during periods of extreme volatility.
By early Thursday, bitcoin had fallen to an intraday low near $69,936, cementing a downtrend that began after Bessent's testimony. The move reflects a broader recalibration in crypto markets, which are grappling with hawkish regulatory signals and shifting macroeconomic expectations. Notably, President Trump's recent nomination of Kevin Warsh—a figure viewed by markets as favoring tighter monetary policy—to lead the Federal Reserve has added to the uncertainty, pressuring risk assets across the board.
Adding fuel to the fire, prominent investor Michael Burry—famed for predicting the 2008 housing collapse—issued a stark warning on his Substack. He argued that a sustained price decline could trigger a "death spiral" for bitcoin, which he labeled a "purely speculative asset" lacking the fundamental hedge qualities of gold. Burry's critique resonated with traders already nervous about the asset's nearly 20% year-to-date decline and its fourth consecutive monthly loss.
Market analysts point to a clear shift in sentiment. "Current flows suggest sentiment has shifted meaningfully," noted strategists at 10X Research after bitcoin broke below the key $73,000 support level. Data indicates investors are hesitant to "buy the dip," focusing instead on deleveraging and unwinding positions. Sean Farrell, Head of Digital Assets at Fundstrat, identified the mid-$70,000 zone as a logical support area, citing technical levels from early 2024 and 2025. However, he cautioned that "an ample amount of positioning risk in traditional markets" continues to threaten crypto's near-term stability.
The weakness was not isolated to bitcoin. Ether (ETH-USD) and other major altcoins also traded lower, highlighting the pervasive fragility across digital asset markets. Aside from a brief rally last month, the sector has struggled since late 2024 amid whale selling and forced liquidations.
Market Reactions:
David Chen, Portfolio Manager at Horizon Capital: "Bessent's comments simply formalize what was always implicit: crypto remains an institutional wild west. The removal of a hypothetical bailout forces a more disciplined, fundamentals-driven valuation. This volatility is a painful but necessary step toward maturity."
Maya Rodriguez, Retail Investor & Crypto Advocate: "This is infuriating and hypocritical. Banks get bailouts, but a transformative technology is left to flounder? The government is actively choosing to stifle innovation and protect old financial guard. It's a short-sighted political move that will cost the U.S. its competitive edge."
Dr. Arjun Mehta, Economics Professor at Carlton University: "The market's reaction is less about the bailout itself—which was always a long shot—and more about the signaling. Bessent's testimony, combined with the Warsh nomination, sends a clear message: the era of easy money and regulatory ambiguity is decisively closing. Crypto assets are being repriced for this new, stricter regime."
Sarah Lin, Tech Journalist: "Beyond the price swings, this episode highlights crypto's enduring sensitivity to policy narratives. The market isn't just trading on code or adoption metrics; it's trading on perceptions of regulatory hostility or support. Until that dynamic changes, these sharp reactions to official statements will continue."
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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