US Treasury Confirms Plans to Expand Bitcoin Reserves
The department head stated the administration's intention to increase government holdings of the first cryptocurrency. The news triggered record liquidations of $1.1 billion in positions.
US Strategic Bitcoin Reserve: Why the Market Fell on Good News
[The Gist]: What's Really Happening
On Wednesday, June 3, US Treasury Secretary Scott Bessent testified before the Senate Finance Committee with a statement the crypto community had been waiting for over a year. The Trump administration is "proceeding with maximum deliberate speed" to create a strategic bitcoin reserve, and Bessent urged Congress to pass the CLARITY Act by the end of the summer. On paper, this is a top-tier bullish signal. The head of the US Treasury is talking about bitcoin as a strategic asset on par with gold.
But the market reacted differently. Over 24 hours, $1.1 billion in positions were liquidated, and bitcoin fell below $61,500 before partially recovering. Why? Because professional traders heard something different from retail. They heard Bessent call the process "complex" and "new territory," and that the reserve is still only being filled with confiscated assets.
First, Bessent's key phrase: "budget-neutral strategies for acquiring more." This means the Treasury will not allocate taxpayer funds to buy bitcoin, even if the reserve is codified by law. A budget-neutral approach virtually rules out large purchases on the open market.
Second, Bessent made a caveat that only institutions noticed: "We use best practices and things will be durable for the future." He repeated the word "durable" twice. In the Treasury context, this means the process will be slow, bureaucratic, and likely technically challenging to deploy quickly.
Third, the current reserve size of 328,372 BTC, worth about $20-25 billion, is a drop in the ocean compared to bitcoin's market cap of $1.3 trillion. It's not enough to create sustained buying pressure. The market realized: there is no catalyst, just another layer of bureaucracy.
Timeline and Context
The story began on March 6, 2025, when President Trump signed Executive Order 14233 establishing the US Strategic Bitcoin Reserve and a separate vault for other digital assets. The order had three key points: (1) all confiscated bitcoins go into the reserve, (2) sales are prohibited, and (3) the Treasury and Commerce Department must develop strategies to acquire additional BTC without using budget funds.
A year passed. Senator Cynthia Lummis of Wyoming promoted the BITCOIN Act, which would allow the Treasury to buy up to 200,000 BTC per year for five years, bringing the reserve to 1 million coins. But the bill never passed. New initiatives—the CLARITY Act (a regulatory framework for digital assets) and the ARMA Act (legal codification of the reserve)—are at various stages of consideration.
At the June 3, 2026 hearings, Bessent confirmed that work is ongoing, but without specific timelines or volumes. He also noted that digital assets confiscated from Iran after the closure of the Strait of Hormuz have not yet been included in the reserve. This is an important detail the market missed.
For full context: Bessent's statements came amid an already unfolding correction. The day before, on June 2, CoinDesk reported liquidations of $1.84 billion. Bitcoin fell from $71,000 to $65,700, then to $61,460. By June 5, the price consolidated above $64,000, but open interest in futures continued to rise—a sign that new short positions were opening on top of liquidated longs.
Who Wins and Who Loses
Winners:
- Large institutional custodians. Coinbase Custody, Fidelity Digital Assets, Anchorage Digital, BNY Mellon. If the reserve expands, the Treasury will need partners to store assets. Bessent explicitly mentioned "best practices" and "the process of custodying these assets." Contracts to service a government reserve mean stable income for years.
- Low-cost mining companies. Marathon Digital, Riot Platforms, Core Scientific. The reason is not obvious: if the government doesn't buy on the open market but wants to expand the reserve in a budget-neutral way, the only option is partnerships with miners, where payment for new coins comes as a portion of mined BTC. This is already practiced in Bhutan, which mines bitcoin using state hydroelectric power.
- Senator Cynthia Lummis and her political group. Every hearing, every quote from Bessent puts pressure on undecided senators. Lummis's BITCOIN Act version calls for buying 1 million BTC over 5 years. If it passes, Wyoming will position itself as a "crypto state" with corresponding tax and business benefits.
Losers:
- Traders who went long on the news. They expected Bessent's confirmation to push the price to $75,000–$80,000. Instead, they got a decline that hit their stop-losses. $1.1 billion in liquidations in one day is a painful price for believing in "government recognition."
- Highly leveraged altcoins. Ethereum lost 9% and fell below $1,900; Solana similarly. Bitcoin dominance, which usually rises in uncertain times, increased, pulling liquidity from the rest of the market. Coins named in the CoinDesk report—NEAR, HYPE, DOGE, SUI—suffered the most.
- Small miners without hedging. For them, $61,500 is around the cost of production on old equipment (S19, M30). If the price stays below $65,000 for a month, many private mining farms in North America will become unprofitable and start selling equipment, further squeezing margins.
What the Media Isn't Saying
Insight #1: Bessent didn't guarantee the reserve would be increased through purchases. He guaranteed it wouldn't be sold.
Notice the wording. Bessent said, "We are proceeding with the Strategic Bitcoin Reserve" and "we are making sure things will be durable for the future." He never said "we will buy more" in the present or future tense. All he confirmed is that confiscated bitcoins (328,372 coins) will be held, not sold.
This is a key difference. The market, especially retail, heard "the government is buying bitcoin." Reality: the government simply stopped selling it. The "no sell" program was introduced back in March 2025. Bessent's statement is a confirmation of the status quo, not new policy. But for liquidating long positions, a misinterpretation of the news is enough.
Insight #2: Bessent's reference to Iran explains why the reserve could grow to $40 billion without a single market purchase.
In Bessent's testimony, there was a phrase most news aggregators omitted: he declined to comment on whether $1 billion in digital assets confiscated from Iran are included in the reserve. Recall: Iran, according to Western intelligence, began collecting fees in bitcoins from ships passing through the Strait of Hormuz after its partial blockade in February 2026.
If these assets are finally confiscated and added to the reserve, the total volume would grow by 15–20% without any market impact—and without budget spending. This is the ideal "budget-neutral" scenario that Bessent and his team are likely already working on with the Department of Justice. The market hasn't even considered such a source of new coins for the reserve.
Insight #3: The CLARITY Act isn't about the crypto market, but about jurisdictional arbitrage between the SEC and CFTC.
Bessent said he expects the CLARITY Act to pass "this summer." This law determines which tokens are securities (regulated by the SEC) and which are commodities (regulated by the CFTC). At first glance, this is an internal legal issue.
But the real goal is to bring back to the US market companies that left for Europe and Asia due to regulatory uncertainty. Bessent said outright: "bring US best practices onshore." This means the Treasury sees the CLARITY Act not as investor protection, but as industrial policy. Passing the law would mean the US enters a "crypto business attraction mode," positive for Coinbase and Circle, but not necessarily for bitcoin's price in the short term.
Forecast: Next 30 Days and 90 Days
30 days (until July 5):
- Events: At the end of June, the Senate is expected to vote on the CLARITY Act if Bessent lobbies with current intensity. Passage through the Senate (likely by a narrow majority) will trigger a rally in US crypto company stocks: Coinbase (+15–20%), MicroStrategy (+10–15%), Galaxy Digital (+12–18%). Bitcoin could gain +5–8% on the news, but the main move will be in sector stocks, not the coin itself.
- BTC price range: I expect consolidation in the range of $62,000 – $68,000. A break below $60,000 is unlikely without an external shock (e.g., new SEC crackdowns). A break above $70,000 would require not just Bessent's words but real actions—like including Iranian assets in the reserve or a public contract with a custodian.
- Risk: If the CLARITY Act gets stuck in committees or is rejected, bitcoin could fall to $58,000 within 48 hours of the news. Political risk remains high: Congressional elections are approaching, and crypto laws are becoming hostages of electoral dynamics.
90 days (until September):
- Legislative scenario: The most likely path for the bitcoin reserve is not a standalone BITCOIN Act, but inclusion of its provisions in the National Defense Authorization Act (NDAA)—the mandatory annual defense budget. This will happen in September when Congress returns from summer recess. In the NDAA, the reserve will be codified as part of strategic national assets, reducing the risk of repeal by the next president.
- Price effect: Including the reserve in the NDAA will be perceived by the market as "insurance against political risk," potentially lifting bitcoin to $78,000 – $82,000 by October. But this won't be a sharp jump, but a gradual rise amid declining volatility.
- Long-term structural shift: The main effect of Bessent's policy over 90 days is not price, but institutionalization. Large pension funds (CalPERS, Teachers Insurance) and endowments (Harvard, Yale) will start allocating 1–3% of their portfolios to bitcoin, using the argument "the US government considers it a strategic asset." This will bring $30–50 billion in new money to the market in the second half of 2026.
Editorial Forecast
Asset: Bitcoin (BTC) / Direction: Sideways with a downward bias for 48 hours, then moderate growth to $67,000.
Key levels: Current level ~$64,500. Support at $62,800 (June 3 lows) and $61,500 (absolute liquidation low). Resistance at $66,000 (pre-drop level) and $67,200 (200-hour moving average).
Confidence: Medium (55%). The market is oversold after $1.1 billion in liquidations, but open interest has risen, signaling accumulation of short positions.
Main risk: If over the weekend information emerges that the Treasury has indeed started negotiations with Coinbase or Fidelity for expanded custodial services for the reserve, this could trigger a sharp reversal upward of $5,000–7,000. However, no such news exists yet, and Bessent's testimony contained no concrete steps—only general statements.
— Editorial Team
