US Treasury Secretary Scott Bessent said on August 14, 2025, that the government is still considering ways to increase its bitcoin holdings through budget-neutral measures.

Earlier in the day, Bessent had indicated that the Strategic Bitcoin Reserve would only include the US$15 billion to US$20 billion in bitcoin already held by the government, with no plans for new purchases.

Later, he clarified that his department is looking at options to acquire more bitcoin beyond the tokens already forfeited to the government, which will serve as the reserve’s core.

President Donald Trump signed an executive order in March to establish the Strategic Bitcoin Reserve.

Bitcoin traded around US$118,000 late August 14, 2025,, down from a record high of US$124,000 earlier in the day.

The drop followed a higher-than-expected US Producer Price Index report, raising concerns about inflation and the likelihood of the Federal Reserve cutting interest rates in September.

🔗 Source: CoinDesk

🧠 Food for thought

1️⃣ Government’s track record suggests missed opportunities with bitcoin holdings

The US government has historically been one of the largest bitcoin holders through law enforcement seizures, but its approach to managing these assets reveals a pattern of selling at suboptimal prices.

Between June 2014 and November 2015, the U.S. Marshals Service conducted bitcoin auctions with an average sale price of just $379 per bitcoin1. During one notable auction, venture capitalist Tim Draper purchased 30,000 bitcoins for approximately $18.5 million, which appreciated to around $300 million within 2.5 years1.

The government has also struggled with timing, including a failed attempt to sell 513 bitcoins in January 2018 when prices had dropped nearly 50% from their peak1. Additionally, the lack of transparency around bitcoin seizures has led to cases where bitcoins may have been permanently removed from circulation, as seen with 322 bitcoins seized from a Texas marijuana dealer in 2014 with no record of subsequent sale1.

2️⃣ Bitcoin’s inflation hedge narrative faces real-world policy constraints

Thursday’s price drop from $124,000 to $118,000 following the strong Producer Price Index report demonstrates how bitcoin remains sensitive to traditional monetary policy signals despite its “digital gold” narrative.

Research shows bitcoin does appreciate during inflationary shocks, confirming its potential as an inflation hedge, but it declines in response to financial uncertainty shocks, unlike gold2. This dual nature explains why bitcoin dropped when the PPI report raised questions about Federal Reserve rate cuts in September.

The timing creates a paradox for the Strategic Bitcoin Reserve concept: while bitcoin’s fixed supply of 21 million coins theoretically makes it attractive during inflationary periods3, rising interest rates that combat inflation make traditional yield-bearing investments more attractive, potentially diverting capital away from riskier assets like cryptocurrencies4.