On February 4 (local time), during a tense hearing before the House Financial Services Committee, U.S. Treasury Secretary Scott Besant was asked whether the Treasury had the authority to purchase Bitcoin or other cryptocurrencies. He responded unequivocally: "I do not have the authority to do so."
His statement sent shockwaves through the market. Bitcoin immediately fell below $70,000, briefly approaching $69,000, with a nearly 8% drop in 24 hours. The entire cryptocurrency market lost about $186 billion in market capitalization in a single day, and more than 170,000 investors were liquidated.
Turmoil at the Hearing
From the outset, the hearing veered off course. According to the Associated Press, the session repeatedly devolved into heated verbal clashes, even including personal insults.
As lawmakers pressed Besant on crypto policy and the Trump family’s ties to World Liberty Financial, the atmosphere became chaotic. Democratic Representative Gregory Meeks shouted at Besant, "Stop covering for the President! Stop groveling before him!"
During questioning, Besant repeatedly interrupted lawmakers and made disparaging remarks, sparking fierce arguments on both sides.
Focus: World Liberty Financial
A central focus of the hearing was the Trump-linked crypto company, World Liberty Financial. The company is under congressional investigation due to investments from the UAE royal family.
On February 4, California Democratic Representative Ro Khanna sent a letter to World Liberty Financial co-founder Zach Vitkov, highlighting reports that an entity controlled by UAE royals purchased nearly 49% of the company’s shares for about $500 million. This transaction occurred shortly before President Trump took office.
Khanna described these deals as "shocking and scandalous," raising concerns that foreign interests could influence key U.S. policies—such as technology competition with China—through private financial stakes.
Market Meltdown
Following the hearing, the crypto market experienced a sharp sell-off. As of February 5, the price of Bitcoin had dropped to around $70,326.5, a 7.65% decline over 24 hours.
The plunge wasn’t limited to Bitcoin; the entire crypto market suffered heavy losses:
Major Cryptocurrency Sell-off Comparison
| Cryptocurrency | Price (USD) | 24h Decline | Key Support Level |
|---|---|---|---|
| Bitcoin (BTC) | 70,326.5 | 7.65% | $70,000 |
| Ethereum (ETH) | Below $2,100 | Over 8% | $2,100 |
| XRP | $1.42 | Over 10% | $1.40 |
According to CoinGlass, 176,200 traders were liquidated globally in the past 24 hours, with total liquidations reaching $871 million. The largest single liquidation occurred on Aster - BTCUSDT, valued at $11.37 million.
Bitcoin’s Difficult Stretch
Bitcoin is facing a tough period. Over the past eight trading days, it has fallen on seven, now down more than 40% from its all-time high of $126,080 set in October last year.
Market analysts noted that after Bitcoin fell below $75,000, a wave of stop-loss orders triggered forced liquidations of leveraged positions, especially in the derivatives market.
Sean Farrell, Head of Digital Assets at Fundstrat, commented, "The mid-$70,000 range is a reasonable support zone, as the intraday high in March 2024 was around $74,000, and the intraday low during the tariff-driven sell-off in April 2025 was also near this level."
Shifting Regulatory Winds
Notably, while Besant made it clear during the hearing that there would be no bailout for cryptocurrencies, the U.S. Financial Stability Oversight Council (FSOC) took a softer tone in its newly released 2025 annual report. The council no longer labels crypto assets as a systemic financial risk in the same strong terms as before.
FSOC noted that the GENIUS Act, taking effect in July, has established a federal regulatory framework for payment stablecoins, providing regulatory clarity and supporting domestic stablecoin innovation while managing risks.
The report did not repeat the 2024 warnings about stablecoins being "prone to runs" or the risk of market concentration amplifying systemic threats. It also downplayed concerns about illicit activities. This shift signals that U.S. crypto regulation is moving from "risk warnings" toward "regulatory integration."
Warnings from Prominent Investors
Following Besant’s remarks, renowned investor Michael Burry issued a further warning. He said that continued declines in Bitcoin’s price could "trigger a death spiral and lead to massive value destruction," describing Bitcoin as a "purely speculative asset" that falls far short of gold and other precious metals as a hedge against devaluation.
Burry, famous for predicting the 2008 financial crisis, intensified market fears with his comments. Several analysts pointed out that the crypto market’s current fragility, coupled with high-risk positions in traditional markets, could further undermine the crypto sector.
Investor Strategies
In light of the volatility, Gate analysts recommend a cautious approach. In the short term, the $70,000 to $73,000 range will be a key support zone for Bitcoin.
For long-term investors, the current market correction may present a buying opportunity. Fundstrat’s Sean Farrell noted, "All else being equal, last weekend’s levels and the degree of capitulation observed make for a more attractive short-term risk/reward."
Gate’s price prediction data shows that Bitcoin’s average price in 2026 is expected to be $70,578.8, with a possible range between $51,522.52 and $85,400.34.
Looking Ahead
As of February 5, Bitcoin was trading at $69,326.5 on Gate, with market sentiment still fragile. This bout of volatility, triggered by political drama in Washington, once again highlights the complex interplay between crypto markets and traditional financial regulation.
Besant’s statement that he has "no authority to bail out" crypto continues to reverberate, while the congressional probe into World Liberty Financial remains ongoing. The crypto market is learning a hard lesson: on the road to mainstream adoption, political rhetoric can sometimes move markets more directly than technical indicators.
