Published: February 5, 2026 | Updated: February 5, 2026 | Tapbit Macro Policy & Regulatory Desk
U.S. Treasury Secretary Scott Bessent delivered a clear and unambiguous message to Congress on February 4, 2026: the federal government does not have — and will not seek — the authority to buy Bitcoin or other cryptocurrencies with taxpayer dollars, nor can it direct private banks to provide bailouts or liquidity support to the digital asset sector during periods of market stress.
The statements came during a House Financial Services Committee hearing titled “Oversight of the Treasury Department,” where Bessent responded to pointed questions from both Republican and Democratic lawmakers about the government’s potential role in cryptocurrency markets. The testimony removed any remaining ambiguity around whether the Trump administration would pursue active intervention or reserve-building programs using public funds, contributing to a fresh wave of risk-off sentiment that saw Bitcoin drop ~2% to trade near **$73,000** in the hours following the remarks.
Key Testimony Quotes – Bessent’s Position on Crypto Authority
During exchanges with members including Rep. Brad Sherman (D-CA) and others, Bessent provided the following direct answers:
“The Treasury Department does not have the statutory authority to purchase cryptocurrencies as a reserve asset using taxpayer funds. Any such program would require explicit new legislation from Congress.”
“Neither I as Treasury Secretary nor the Financial Stability Oversight Council has the power to direct private banks to extend credit to any specific industry or sector, including digital assets. Banks are subject to the same prudential standards and risk assessments regardless of the asset class.”
“We continue to monitor developments in digital assets closely, but the government’s role is oversight and consumer protection — not market support or price stabilization.”
Bessent also reiterated the administration’s support for innovation through legislation such as the GENIUS Act for stablecoins and efforts to reduce prior regulatory hostility, but drew a firm line against any form of public-sector bailout or direct asset purchases.
Immediate Market Reaction – February 4–5, 2026
The testimony quotes began circulating widely on financial terminals and social media shortly after the 10:00–11:00 a.m. ET hearing segment:
- Bitcoin fell from ~**$74,800** to an intraday low near **$72,900** within 90 minutes
- Ethereum and major altcoins saw amplified losses (ETH –3.5% to –4.8%, SOL –6–8%)
- Funding rates on BTC perpetuals briefly turned more negative
- Spot BTC ETF outflows accelerated modestly in the afternoon session
- Stablecoin mint/burn data showed elevated USDT redemptions → some capital exiting to fiat
While the move was contained within recent volatility bands, it reinforced crypto’s sensitivity to U.S. policy signals — particularly those that foreclose any form of government backstop or reserve-building program.
Broader Policy Context – Where the U.S. Stands on Crypto in 2026
Bessent’s position fits into a consistent pattern of U.S. government rhetoric since 2022:
- No strategic Bitcoin reserve purchases: Multiple proposals (e.g. Sen. Lummis bill) would require new legislation and face opposition from Treasury and Fed officials
- No sector-specific bailouts: The 2023 banking mini-crisis (Silvergate, Signature, SVB) showed regulators are unwilling to create special carve-outs for crypto-linked institutions
- Focus on stablecoin regulation: Support for the GENIUS Act and similar frameworks that emphasize 1:1 reserves, audits, AML/KYC, and consumer protections — not market support
- Market-structure clarity: Treasury backs efforts like the CLARITY Act to divide oversight between SEC (tokenized securities) and CFTC (digital commodities), but has not endorsed specific language
The administration promotes crypto innovation and reduced regulatory hostility, but draws a clear line against treating digital assets as strategic national reserves or recipients of public financial support.
Trading & Positioning Strategies on Tapbit – February 2026
- Sign Up on Tapbit (0% maker fees)
- Deposit USDT or JPY via bank transfer / P2P
- Policy risk hedge: Long XAU/USDT perpetuals or short equity indices on renewed regulatory uncertainty
- Capitulation dip buy: DCA BTC/USDT on pullbacks to $72k–$74k exhaustion zones
- Stablecoin parking: Hold USDT/USDC → earn yield while monitoring policy headlines
- Risk control: Max 1–2% account risk per trade; isolated margin; trailing stops below recent lows
FAQs – Bessent Testimony & Crypto Markets (February 2026)
Does the U.S. Treasury plan to buy Bitcoin?
No. Secretary Bessent explicitly stated that Treasury has no statutory authority to purchase cryptocurrencies with taxpayer funds. Any reserve would require new legislation from Congress.
Can the government bail out crypto firms?
Bessent clarified that the federal government cannot direct private banks to extend credit to crypto entities. No special bailout mechanisms exist or are planned.
Why did Bitcoin drop after the testimony?
The statement eliminated speculation about government support, reserve buying, or implicit backstops → removed a potential bullish narrative and triggered tactical selling in a risk-off environment.
Is this bearish or bullish long-term for crypto?
Short-term bearish (removes tailwind). Long-term neutral to mildly positive — clearer boundaries (no special favors, but also no outright hostility) can support institutional adoption once uncertainty fades.
Conclusion & What to Watch Next
Treasury Secretary Scott Bessent’s February 2026 congressional testimony firmly closed the door on any near-term U.S. government cryptocurrency purchases or sector bailouts using taxpayer funds. The explicit rejection of authority — delivered under oath — removed a lingering bullish narrative and contributed to Bitcoin’s ~2% drop to around $73,000 in the immediate aftermath.
Tapbit offers traders clean execution during policy-driven volatility: 0% maker fees on BTC/USDT, ETH/USDT & major pairs, deep liquidity, up to 125x leverage on perpetuals (use conservatively), staking/yield options, and instant fiat ramps. Key events to monitor: delayed January jobs report (week of Feb 9–13), February CPI release, Fed speakers, ETF flow direction, CLARITY Act Senate progress, and any follow-up Treasury or White House clarifications — U.S. policy signals will continue to be a major short-term driver of crypto price action throughout 2026.
Trade Bitcoin volatility & policy risk on Tapbit:
Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. Government statements and regulatory positions can cause sharp movements. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
