Besent's statement sparks market reaction: The Treasury Department has no authority to "rescue Bitcoin," as crypto evaporates nearly $200 billion

On February 4th, local time, U.S. Treasury Secretary Janet Yellen testified before the House Financial Services Committee in a heated hearing. When asked whether the Treasury Department has the authority to purchase Bitcoin or other cryptocurrencies, she clearly stated: “I do not have the authority to do so.”

This statement quickly triggered a market reaction. Bitcoin dropped below $70,000, approaching $69,000 at one point, with a 24-hour decline of nearly 8%. The entire cryptocurrency market lost approximately $186 billion in market value in a single day, with over 170,000 investors facing liquidations.

Hearing Controversy

The hearing deviated from the usual course right from the start. According to the Associated Press, the session repeatedly turned into heated exchanges, even including insults and attacks.

When lawmakers questioned Yellen about cryptocurrency policies and the relationship between the Trump family and the World Free Finance Company, the scene once spiraled out of control. Democratic Representative Gregory Micks shouted at Yellen, “Stop covering for the President! Stop kowtowing to him!”

During the questioning, Yellen not only interrupted lawmakers multiple times but also made insulting remarks, sparking fierce arguments on both sides.

Focus: World Free Finance Company

One of the core issues of the hearing was the Trump family-related cryptocurrency firm — the World Free Finance Company. The company is under congressional investigation for its involvement with investments from the UAE royal family.

California Democratic Congressman Ro Khanna pointed out in a letter to co-founder Zack Vitkoff on February 4th that reports indicated entities controlled by the UAE royal family purchased nearly 49% of the company for about $500 million, a transaction that took place shortly before President Trump’s inauguration.

Khanna expressed concerns that these transactions are “shocking and scandalous,” potentially allowing foreign powers to influence key U.S. policies, such as technology competition with China, through private financial interests.

Market Crash and Plunge

Following the hearing, the cryptocurrency market experienced a catastrophic decline. As of February 5th, Bitcoin’s price had fallen to around $70,326.5, a 7.65% drop within 24 hours.

This sharp decline was not limited to Bitcoin; the entire crypto market was heavily impacted:

Major Cryptocurrency Price Drop Comparison

According to CoinGlass data, in the past 24 hours, a total of 176,200 traders were liquidated globally, with total liquidation amount reaching $871 million. The largest single liquidation occurred on Aster - BTCUSDT, valued at $11.3666 million.

Bitcoin’s Difficult Moment

Bitcoin is going through a tough period. Over the past eight trading days, Bitcoin has declined in seven, dropping more than 40% from its all-time high of $126,080 set in October last year.

Market analysts note that after breaking below $75,000, a large number of stop-loss orders were triggered, forcing leveraged positions to be liquidated, especially in the derivatives market.

Sean Farrell, Head of Digital Assets at Fundstrat, said, “The mid-range of $70,000 is a reasonable support zone because around March 2024, approximately $74,000 was an intraday high, and during the tariff-driven sell-off in April 2025, the intraday low was also near this level.”

Changes in Regulatory Outlook

It is noteworthy that although Yellen explicitly stated during the hearing that there would be no bailout for cryptocurrencies, the U.S. Financial Stability Oversight Council (FSOC) has softened its stance on crypto assets in its latest 2025 annual report, no longer reiterating the previous strong language that viewed them as systemic financial risks.

The FSOC stated that the “GENIUS Act,” which took effect in July this year, has established a federal regulatory framework for payment stablecoins, bringing clarity to regulation and helping to promote innovation in U.S.-based stablecoins while managing risks.

The report no longer repeats the warnings from the 2024 report about stablecoins being “prone to runs” and the potential for highly concentrated markets to amplify systemic risks, and it downplays concerns about illegal activities. This indicates that U.S. regulatory focus on crypto assets is shifting from “risk warnings” to “systemic integration.”

Warnings from Notable Investors

Following Yellen’s remarks, well-known investor Michael Burry issued further warnings. He stated that the continued decline in Bitcoin’s price could “trigger a death spiral, leading to a large-scale collapse of value,” and characterized Bitcoin as a “purely speculative asset,” far from the hedge against inflation that gold and other precious metals provide.

Burry, famous for accurately predicting the 2008 financial crisis,’s warning has further fueled market panic. Several analysts pointed out that the current fragile state of the crypto market, combined with the substantial risk in traditional markets, could have more adverse effects on the crypto sector.

Investor Strategies

In response to the market volatility, Gate analysts recommend a cautious approach. In the short term, the key support zone for Bitcoin is expected to be between $70,000 and $73,000.

For long-term investors, the current market correction may present an entry opportunity. Sean Farrell from Fundstrat said, “All else being equal, the levels reached last weekend and the observed capitulation suggest a more attractive risk/reward profile in the short term.”

Gate’s price forecast indicates that the average price of Bitcoin in 2026 is projected to be $70,578.8, with a volatility range between $51,522.52 and $85,400.34.

Future Outlook

As of February 5th, Bitcoin’s trading price on Gate was approximately $69,326.5, and market sentiment remains fragile. This market turbulence triggered by Washington’s political turmoil once again highlights the complex interaction between cryptocurrency and traditional financial regulation.

Yellen’s “no authority to rescue” statement still echoes, and investigations into the World Free Finance Company on Capitol Hill continue. The crypto market is learning a lesson: on the road to mainstream acceptance, political discourse sometimes has a more direct impact on market movements than technical indicators.