Treasury Secretary Scott Bessent informed Congress he has no authority to bail out Bitcoin. The trade got here throughout a Senate Banking Committee listening to, when Senator Brad Sherman requested whether or not the Treasury might intervene to help cryptocurrency costs.
Bessent’s reply was direct: he can not use taxpayer {dollars} to purchase Bitcoin, and the query falls outdoors his mandate as chair of the Monetary Stability Oversight Council.
Sherman’s query was a problem, not a coverage proposal. Might the President Donald Trump administration use taxpayer cash to prop up property aligned with the president’s pursuits?
Bitcoin, together with Trump-branded tokens, sat on the heart of that concern.
The query itself reveals an irony that the Bitcoin neighborhood spent 15 years making an attempt to keep away from. Bitcoin launched in 2009 as a response to financial institution bailouts, a system designed to function with out a government and to be insulated from authorities intervention.
Now it sits shut sufficient to political pursuits that members of Congress ask whether or not the federal government may step in.
The irony runs deeper than rhetoric. If the US ever “bails out crypto,” it will not occur by shopping for Bitcoin. It can occur by defending the plumbing Bitcoin now depends on.
What a bailout truly means
The phrase “bailout” combines three distinct actions right into a single time period.
The primary is direct value help: the federal government buys an asset to forestall its value from falling. That is what Sherman’s query implied: whether or not the Treasury would step in as a purchaser of final resort when Bitcoin drops.
The second is liquidity backstops for intermediaries. The federal government supplies emergency funding or ensures to establishments that facilitate buying and selling, custody, or settlement. This protects market functioning somewhat than asset costs.
The Federal Reserve used this strategy through the 2008 monetary disaster, lending to banks and sellers to maintain credit score markets operational.
The third is stabilizing adjoining markets on which crypto relies upon. If a stablecoin run forces mass liquidation of Treasury payments, policymakers can intervene to guard short-term funding markets. Bitcoin advantages not directly as a result of the greenback rails it makes use of stay intact.
Bessent’s “no authority” reply applies cleanly to the primary case. There isn’t a standing authorized mechanism for the Treasury to spend taxpayer cash to purchase Bitcoin for value help.
The opposite two instances function in a special authorized and political universe.
What the US already does
The US already holds Bitcoin it seized throughout legal investigations.
In March 2025, Trump signed an govt order establishing a US authorities Bitcoin reserve constructed from cash seized in legal and civil forfeiture instances. The order frames the reserve as a “digital Fort Knox,” mandates that seized Bitcoin not be offered, and directs Treasury and Commerce to discover “budget-neutral” methods to accumulate further Bitcoin.
The excellence issues. The US accumulates Bitcoin as a byproduct of legislation enforcement, not as a coverage software to handle crypto costs. Holding forfeited property is legally and politically totally different from deploying taxpayer funds to prop up a unstable market.
This creates a shiny line: the federal government as a passive holder versus the federal government as an lively purchaser to forestall declines. Crossing that line requires express congressional authorization.
Why Bitcoin itself resists bailouts
Traditional bailouts goal entities with steadiness sheets, regulated liabilities, and failure modes that cascade by credit score markets.
The federal government recapitalizes a financial institution by injecting fairness, backstopping deposits, or guaranteeing short-term funding. Every of those actions addresses a contractual obligation that, if left unhappy, might set off broader monetary misery.
Bitcoin has no issuer, no steadiness sheet, and no contractual liabilities to backstop. It’s a protocol, not an establishment. For policymakers to “bail out crypto,” they might find yourself bailing out the establishments round it, akin to banks, cash market funds, cost processors, stablecoin issuers, clearing and settlement nodes, somewhat than the asset itself.
That is the core structural downside: you can not recapitalize a protocol the way in which you recapitalize a financial institution.
Bessent’s “no authority” reply is shorthand for the absence of a authorized mechanism.
Altering that requires Congress to behave. Senate Invoice 954, the “BITCOIN Act of 2025,” affords a template for what express authorization would appear like.
The invoice proposes that the Treasury buy a million Bitcoins over 5 years and maintain them in belief. This isn’t present legislation, however a proposed legislation that will create the authority Bessent says he lacks.
The pathway from “no authority at the moment” to “authority tomorrow” runs by an overt congressional vote. Lawmakers must go on file supporting taxpayer purchases of a unstable asset with no money flows, no regulatory oversight, and no conventional valuation framework.
| “Bailout” kind | What it’s | Who/what will get supported | What it means for BTC value | Who has authority |
|---|---|---|---|---|
| Direct value help | Treasury (or one other company) buys BTC to cease/gradual a drop | The asset itself | Direct buyer-of-last-resort impact | Would require express congressional authorization/appropriation |
| Liquidity backstop for intermediaries | Emergency funding/ensures to banks/sellers/market utilities tied to crypto plumbing | The establishments that custody/clear/finance | Oblique (helps market perform; doesn’t “purchase BTC”) | Sometimes Fed/Treasury instruments with authorized constraints; not “Treasury buys BTC” |
| Stabilize adjoining markets (Treasuries/funding) | Intervention to maintain T-bills / cash markets functioning throughout a run (e.g., stablecoin redemptions) | Treasury market + short-term funding rails | Oblique (retains greenback rails intact) | Commonplace financial-stability mandate lanes |
The implicit bailout that might truly occur
If the US ever bails out crypto, the most probably route is to guard infrastructure that has turn out to be system-linked.
The primary pathway runs by stablecoins and Treasury markets. Stablecoin issuers maintain monumental quantities of short-term US authorities debt. S&P International Scores estimates that dollar-pegged stablecoin issuers held roughly $155 billion in Treasury payments by the top of October 2025.
Tether alone circulates over $185 billion in USDT, in accordance with information from Artemis. The Monetary Stability Oversight Council’s 2025 annual report explicitly flags the necessity to monitor how stablecoin regulation impacts Treasury market construction, functioning, and demand.
If a serious stablecoin confronted a run and needed to liquidate T-bills at scale, policymakers might step in to stabilize the Treasury market, which is inside their mandate, somewhat than “save Bitcoin.”
Crypto would profit as a result of the greenback infrastructure it depends on would stay operational.
The intervention would goal authorities securities and short-term funding markets, not cryptocurrency. Nonetheless, the sensible impact can be an implicit bailout of the crypto ecosystem’s plumbing.
The second pathway entails emergency liquidity to systemically necessary intermediaries.
The Federal Reserve’s emergency authority beneath Part 13(3) of the Federal Reserve Act permits it to offer liquidity throughout “uncommon and exigent circumstances.”
The Congressional Analysis Service notes that the Fed has traditionally used this authority to help market functioning by broadly primarily based services, typically with Treasury credit score safety backing the packages.
If crypto plumbing ever turned entangled with core funding markets, by prime brokerage relationships, settlement networks, or collateralized lending, emergency liquidity might movement to eligible monetary establishments.
The Fed wouldn’t lend to the Bitcoin community. It will lend to banks and market utilities that facilitate crypto buying and selling and settlement.
The third pathway is regulatory somewhat than monetary. Policymakers can scale back the likelihood of a disaster by adjusting guidelines somewhat than deploying money.
This contains permitting banks to intermediate stablecoins extra simply, clarifying reserve composition necessities, or easing settlement constraints so redemptions clear easily.
These actions do not contain taxpayer funds, however they perform as a type of “bailout by regulation.”
The irony Bitcoin cannot escape
Bitcoin was designed to eradicate the necessity for trusted intermediaries and insulate cash from authorities management.
Satoshi Nakamoto’s white paper cited the 2008 monetary disaster as proof that the present system required an excessive amount of belief. The protocol was designed to function with out bailouts as a result of it will not depend on banks.
Fifteen years later, Bitcoin trades on centralized exchanges, settles by regulated intermediaries, and more and more depends on stablecoins backed by the identical Treasury securities that anchored the monetary system it was created to switch.
If a disaster ever forces the federal government to step in, it will not be to save lots of Bitcoin. It is going to be to save lots of the establishments and markets Bitcoin now will depend on.
The bailout Bitcoin cannot get is a direct taxpayer buy. The bailout it would get is the one designed to guard every part else.
