The US Treasury has expressed grave concerns following a significant drop in Bitcoin’s value within just a few hours.
Bitcoin has experienced another downturn, with its value decreasing by 11 percent to about $67,000. This means it is now worth less than after Donald Trump’s second election to the White House, as reported by AP.
On October 6 of last year, Bitcoin reached a peak of $126,210.50, according to data from the crypto trading hub Coinbase. Since then, it has nearly halved in value.
Following Trump’s election in November 2024, Bitcoin initially rose, partly due to expectations of a more crypto-friendly administration in Washington.
The ongoing difficulties faced by the cryptocurrency have sparked discussions about its potential trajectory.
Investor Michael Burry has cautioned that a continuous decline might trigger a ‘death spiral leading to massive value destruction’.
In a Substack post, he stated, “Bitcoin has been exposed as a purely speculative asset, and is not near the debasement trade hedge that gold and other precious metals are.”
The treasury has now indicated that they ‘do not have the authority’ to intervene in the declining cryptocurrency market.
During a session of the House Financial Services Committee on Wednesday, Treasury Secretary Scott Bessent highlighted that the treasury is not in a position to take action.
Bessent commented, “I do not have the authority to do that, and as chair of FSOC, I do not have that authority.”
According to CNN, this recent decline marks the first time Bitcoin has dipped below $70,000 in approximately 15 months.
Despite the downturn, Bitcoin remains a notably volatile market and has witnessed similar declines in the past.
Nevertheless, some experts have speculated that this downturn is occurring at a time when the currency should be flourishing, as Trump has frequently expressed his support for cryptocurrencies.
However, cryptocurrencies have a history of recovering from significant value drops.
In 2014, the value of cryptocurrencies plummeted dramatically when hackers compromised the Mt. Gox exchange.
This wasn’t the largest drop for Bitcoin either. In 2018, it saw a 74 percent decrease in value as worries grew over the surge of new initial coin offerings.
The years 2021 and 2022 also witnessed crashes, yet the currency has shown resilience and rebounded each time.