Treasury Secretary Scott Bessent told Congress he does not have the authority to bail out Bitcoin. The exchange came to light during a Senate Banking Committee hearing when Sen. Brad Sherman asked whether the Treasury Department could intervene to support crypto prices.
Bessent's answer was direct. He cannot use taxpayers' money to buy Bitcoin, and this issue is outside the scope of his mandate as chairman of the Financial Stability Oversight Council.
Mr. Sherman's question was a challenge, not a policy proposal. Can President Donald Trump's administration use taxpayer dollars to prop up assets that align with the president's interests?
Bitcoin was at the center of that concern, along with President Trump's branded token.
This question itself reveals the irony that the Bitcoin community has been trying to avoid for 15 years. Bitcoin was launched in 2009 as a response to bank bailouts, a system designed to operate without a central authority and be insulated from government intervention.
Now so close to political interests, members of Congress are questioning whether the government will intervene.
Sarcasm is deeper than rhetoric. If the US were to “rescue cryptocurrencies,” it would not be by buying Bitcoin. It does so by protecting the plumbing that Bitcoin currently relies on.
What does salvation actually mean?
The word “relief” combines three different actions into one term.
The first is direct price support. In other words, the government purchases assets to prevent prices from falling. This is what Sherman's question suggests: whether the Treasury will step in as a buyer of last resort when Bitcoin falls.
The second is a liquidity backstop for intermediaries. Governments provide emergency funds and guarantees to institutions that facilitate trade, custody, and settlement. This protects market functioning rather than asset prices.
The Fed took this approach during the 2008 financial crisis, lending to banks and dealers to keep credit markets operating.
The third is stabilization of the adjacent markets on which cryptocurrencies depend. If stablecoin prices necessitate mass liquidation of Treasury bills, policymakers can intervene to protect short-term money markets. Bitcoin will benefit indirectly, as the dollar rail that Bitcoin uses will remain intact.
Mr. Bessent's answer of “no authority” applies neatly to the first case. There is no legal mechanism for the Treasury to purchase Bitcoin using taxpayer money to maintain the price.
The other two cases play out in different legal and political worlds.
What the US is already doing
The United States already has bitcoins seized during criminal investigations.
In March 2025, President Trump signed an executive order establishing a U.S. government Bitcoin reserve built from coins seized in criminal and civil forfeiture cases. The order frames the reserve as a “digital Fort Knox,” requires the seized bitcoins not to be sold, and directs the Treasury and Commerce departments to consider “budget-neutral” ways to acquire additional bitcoins.
The distinction is important. The United States is accumulating Bitcoin as a byproduct of law enforcement rather than as a policy tool to control crypto prices. Retaining confiscated assets is legally and politically different from deploying taxpayer funds to prop up volatile markets.
This creates a clear line between the government as a passive holder and the government as an active buyer to prevent a decline. Crossing that line requires explicit approval from Congress.
Why Bitcoin itself resists bailouts
Traditional remedies target companies with failure modes that cascade through balance sheets, regulated debt, and credit markets.
Governments recapitalize banks by injecting equity, backstopping deposits, or guaranteeing short-term funds. Each of these measures addresses contractual obligations that, if left unmet, can cause broader financial hardship.
Bitcoin has no issuer, no balance sheet, and no contractual liability to the backstop. It is a protocol, not a system. When policymakers “bail out cryptocurrencies,” they will ultimately be bailing out the institutions around them, such as banks, money market funds, payment processors, stablecoin issuers, and clearing and payment nodes, rather than the assets themselves.
This is the core structural problem. You cannot recapitalize a protocol like you can recapitalize a bank.
Mr. Bessent's answer, “I don't have the authority,” sums up the absence of a legal mechanism.
Congressional action is needed to change that. Senate Bill 954, the “Bitcoin Act of 2025,” provides a template for what explicit authorization looks like.
The bill proposes that the Treasury Department purchase 1 million bitcoins over five years and hold them in trust. This is not current law, but the bill would create powers that Bessent says are lacking.
The path from “no authority today” to “authority tomorrow” is traversed by open parliamentary votes. Lawmakers will have to go on record supporting taxpayer purchases of volatile assets with no cash flow, no regulatory oversight, and no traditional valuation framework.
| “Relief” type | what is it | Who/What do we support? | What BTC price means | who has authority |
|---|---|---|---|---|
| direct price support | Treasury (or another agency) buys BTC to stop/slow the decline | the asset itself | directly Buyer of last resort effect | will be needed Explicit parliamentary approval/appropriation |
| Liquidity backstop for intermediaries | Emergency fund/guarantee Bank/Dealer/Public Utility Company Tied to cryptocurrency plumbing | Institutions that perform storage/clearing/financing | indirectly (Supports market function. Does not “buy BTC”) | usually Fed/Treasury Tools There are legal restrictions. Not “Treasury purchases BTC” |
| Stabilization of adjacent markets (government bonds/funds) | Interventions to maintain Treasury Bills/Money Market Function during execution (e.g. stablecoin redemption) | Government bond market + short-term funding rail | indirectly (Leave the dollar rail as is) | standard Fiscal stability obligations lane |
Possible implied remedies
If the US were to bail out cryptocurrencies, the most likely route would be to protect the infrastructure linked to the system.
The first route is through the stablecoin and government bond markets. Stablecoin issuers hold large amounts of short-term US government debt. S&P Global Ratings estimates that dollar-pegged stablecoin issuers will hold approximately $155 billion in Treasury bills by the end of October 2025.
According to Artemis data, Tether alone has over $185 billion in USDT in circulation. The Financial Stability Oversight Council's 2025 Annual Report underlines the need to monitor how stablecoin regulation impacts the structure, functioning, and demand of government debt markets.
If major stablecoins face a collapse and treasury bills have to be liquidated on a large scale, policymakers may intervene to stabilize the U.S. Treasury market, which is within their mandate, rather than “saving Bitcoin.”
Cryptocurrencies will benefit as the dollar infrastructure they rely on will continue to operate.
The intervention targets government securities and short-term funding markets, not cryptocurrencies. However, the practical effect would be to implicitly bail out the plumbing of the cryptocurrency ecosystem.
The second channel involves emergency liquidity to systemically important intermediaries.
The Federal Reserve's emergency powers under Section 13, Section 3 of the Federal Reserve Act allow it to provide liquidity in “extraordinary and emergency circumstances.”
The Congressional Research Service notes that the Fed has historically used this authority to support market functions through broad-based programs, often with Treasury credit protection supporting its programs.
If the crypto pipeline becomes entangled with core funding markets, such as through prime brokerage relationships, payment networks, or collateralized lending, emergency liquidity could flow to eligible financial institutions.
The Fed will not lend to the Bitcoin network. It will finance banks and market utilities that facilitate crypto trading and payments.
The third channel is regulatory rather than financial. Rather than spending money, policymakers can reduce the probability of a crisis by adjusting the rules.
This could include making it easier for banks to broker stablecoins, clarifying reserve structure requirements, or easing settlement constraints so that redemptions occur smoothly.
These measures do not involve taxpayer funds, but serve as a form of “regulatory relief.”
Ironically, Bitcoin cannot escape.
Bitcoin was designed to eliminate the need for trusted intermediaries and isolate money from government control.
Satoshi Nakamoto's white paper cites the 2008 financial crisis as evidence that the existing system required too much trust. The protocol is bank-agnostic and is designed to work without bailouts.
Fifteen years later, Bitcoin is increasingly reliant on stablecoins traded on centralized exchanges, settled through regulated intermediaries, and backed by the same Treasury securities that underpinned the financial system it was created to replace.
If the crisis forces governments to intervene, it won't be to save Bitcoin. It would save the institutions and markets that Bitcoin currently relies on.
The only remedy Bitcoin won't get is direct purchases by taxpayers. The remedies it may have are designed to protect everything else.
