Bitcoin sinks after Treasury Secretary Bessent says US government can’t tell banks to bail
February 4, 2026
Bitcoin (BTC-USD) fell 2% on Wednesday to around $73,000 per token after Treasury Secretary Scott Bessent suggested the US government would not bail out the cryptocurrency.
In a heated back-and-forth during a House Financial Services Committee hearing, Bessent was asked if the US Treasury had the authority to buy bitcoin or other cryptos.
“I do not have the authority to do that, and as chair of FSOC, I do not have that authority,” Bessent stated.
The decline on Wednesday was also fueled by the broader selling pressure in markets and a warning from notable investor Michael Burry that a sustained decline in bitcoin’s price could “set in motion a death spiral leading to massive value destruction.”
“Bitcoin has been exposed as a purely speculative asset, and is not near the debasement trade hedge that gold and other precious metals are,” Burry, who rose to prominence after predicting the 2008 financial crisis, wrote in his Substack.
The move lower only added to bitcoin’s recent rout. The world’s largest cryptocurrency is down 13% over the past five days.
The world’s largest cryptocurrency dropped sharply last weekend, touching its lowest levels since last April and notching a fourth straight month of losses.
The move lower coincided with President Trump’s announcement on Friday selecting Kevin Warsh to lead the Federal Reserve when Jerome Powell’s term ends in May, a nomination markets view as hawkish.
Ether (ETH-USD) and other digital tokens also slid.
Read more: How to navigate a crypto meltdown
With bitcoin’s next support level at $73,000, “current flows suggest sentiment has shifted meaningfully,” 10X Research strategists wrote in a recent note.
The firm’s strategists pointed to flow and positioning data, which indicated “investors are not yet positioned to buy the dip.”
“While sentiment and technical indicators are approaching extreme levels, the broader downtrend remains intact,” the researchers wrote. “In the absence of a clear catalyst, there is little urgency to step in.”
The firm noted that traders remain focused on deleveraging and unwinding their positions rather than on preparing for a typical snapback rally.
Pressure on digital assets reflected the broader fragility across the crypto market. Aside from a brief bounce last month, bitcoin has struggled since October, when whale selling and forced liquidations swept through the industry.
Fundstrat head of digital assets Sean Farrell said the mid-$70,000 region stands out as a logical support zone, given that around $74,000 was the intraday high in March 2024 and the intraday low in April 2025 during the tariff-driven sell-off.
“All else equal, the levels reached over the weekend and the degree of capitulation observed create a more attractive near-term risk/reward,” Farrell wrote in a Monday note.
The strategist said the pullback could warrant a “modest” deployment of dry powder but warned that conditions are still trending lower, with an “ample amount of positioning risk in traditional markets that could adversely affect crypto markets.”
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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