Treasury Secretary Scott Bessent told Congress he does not have the authority to bail out Bitcoin. The exchange took place during a Senate Banking Committee hearing, when Senator Brad Sherman asked whether the Treasury Department could intervene to support cryptocurrency prices.
Bessent’s response was direct: he cannot use taxpayer money to buy Bitcoin, and the question falls outside his mandate as chairman of the Financial Stability Oversight Council.
Sherman’s question was a challenge, not a policy proposal. Could President Donald Trump’s administration use taxpayer dollars to support assets that align with the president’s interests?
Bitcoin, along with Trump-branded tokens, has been at the center of that concern.
The question itself reveals an irony that the Bitcoin community has tried to avoid for 15 years. Bitcoin was launched in 2009 in response to bank bailouts, a system designed to function without central authority and to be insulated from government intervention.
Now it’s so close to political stakes that members of Congress are wondering whether the government could intervene.
The irony goes deeper than rhetoric. If the US ever “saves crypto,” it won’t be by buying Bitcoin. This will be done by protecting the pipes that Bitcoin now relies on.
What a rescue operation actually means
The word ‘bailout’ combines three different actions into one term.
The first is direct price support: the government buys an asset to prevent its price from falling. This is what Sherman’s question implied: whether the Treasury Department would step in as a buyer of last resort if Bitcoin falls.
The second is the liquidity safety net for intermediaries. The government provides emergency financing or guarantees to institutions that facilitate trading, custody or settlement. This protects the functioning of the market rather than asset prices.
The Federal Reserve used this approach during the 2008 financial crisis, making loans to banks and dealers to keep credit markets operational.
The third is to stabilize adjacent markets on which crypto depends. If a stablecoin run forces a massive liquidation of government bonds, policymakers can step in to protect short-term funding markets. Bitcoin benefits indirectly because the dollar rails it uses remain intact.
Bessent’s answer of ‘no authority’ clearly applies to the first case. There is no existing legal mechanism for the Treasury to spend taxpayer money to purchase Bitcoin for price support.
The other two cases take place in a different legal and political universe.
What the US is already doing
The US already owns Bitcoin seized during criminal investigations.
In March 2025, Trump signed an executive order establishing a US government Bitcoin reserve, built from coins seized in criminal and civil forfeiture cases. The order describes the sanctuary as a “digital Fort Knox,” mandates that the seized Bitcoin cannot be sold, and directs Treasury and Commerce to explore “budget neutral” ways to acquire additional Bitcoin.
The distinction is important. The US is accumulating Bitcoin as a byproduct of law enforcement, not as a policy tool to control crypto prices. Holding on to forfeited assets is legally and politically different from deploying taxpayer dollars to prop up a volatile market.
This creates a clear line: the government as a passive holder versus the government as an active buyer to prevent declines. Crossing that line requires explicit authorization from Congress.
Why Bitcoin itself is resisting bailouts
Classic bailouts target entities with balance sheets, regulated liabilities and failure modes that flow through credit markets.
The government recapitalizes a bank by injecting equity, backing deposits or guaranteeing short-term financing. Each of these actions relates to a contractual obligation which, if not met, could cause wider financial problems.
Bitcoin has no issuer, no balance sheet and no contractual obligations as a backstop. It’s a protocol, not an institution. If policymakers were to bail out crypto, they would ultimately be bailing out the institutions around it, such as banks, money market funds, payment processors, stablecoin issuers, clearing and settlement nodes, rather than the asset itself.
This is the core structural problem: you cannot recapitalize a protocol the way you recapitalize a bank.
Bessent’s “no authority” response is shorthand for the lack of a legal mechanism.
To change that, Congress needs to take action. Senate Bill 954, the “BITCOIN Act of 2025,” provides a template for what explicit authorization would look like.
The bill proposes that the Treasury purchase one million Bitcoins over a five-year period and hold them in trust. This is not current law, but a bill that would create the authority that Bessent says it lacks.
The path from ‘no authority today’ to ‘authority tomorrow’ is through an open vote in Congress. Lawmakers should officially support taxpayer purchases of a volatile asset with no cash flows, no regulatory oversight and no traditional valuation framework.
| Type ‘rescue’ | What it is | Who/what is supported | What it means for the BTC price | Who has authority |
|---|---|---|---|---|
| Direct price support | The Treasury Department (or other agency) buys BTC to stop/slow down a decline | It owns itself | Immediately the ‘buyer-of-last resort’ effect | Would require explicit authorization/appropriation of Congress |
| Liquidity backstop for intermediaries | Emergency financing/guarantees for banks/dealers/market companies tied to crypto plumbing | The institutions that provide custody/clearing/financing | Indirectly (supports the market function; “does not buy BTC”) | Typical Fed/Treasury Tools with legal restrictions; not “Treasury buys BTC” |
| Stabilizing adjacent markets (government bonds/financing) | Intervention to preserve T-bills/money markets functioning during a run (e.g. redeeming stablecoins) | Treasury market + short-term financing rails | Indirectly (keeps dollar rails intact) | Standard financial stability mandate lanes |
The implicit bailout that could actually happen
If the US ever bails out crypto, the most likely route is to protect the infrastructure that has become systemic.
The first path runs through stablecoins and government bond markets. Stablecoin issuers own vast amounts of short-term US government debt. S&P Global Ratings estimates that dollar-pegged stablecoin issuers held approximately $155 billion in government bonds at the end of October 2025.
According to Artemis data, Tether alone circulates more than $185 billion in USDT. The Financial Stability Oversight Council’s 2025 Annual Report explicitly emphasizes the need to monitor how stablecoin regulation affects the structure, functioning and demand of the government bond market.
If a major stablecoin were to have a run and had to liquidate T-bills on a large scale, policymakers could step in to stabilize the Treasury market, which is within their mandate, rather than ‘save Bitcoin’.
Crypto would benefit because the dollar infrastructure it relies on would remain operational.
The intervention would focus on government bonds and short-term finance markets, and not on cryptocurrency. The practical effect, however, would be an implicit bailout for the crypto ecosystem.
The second route includes emergency liquidity for systemically important intermediaries.
The Federal Reserve’s emergency authority under Section 13(3) of the Federal Reserve Act allows it to provide liquidity during “unusual and exigent circumstances.”
The Congressional Research Service notes that the Fed has historically used this authority to support market functioning through broad-based facilities, often with credit protection of the Treasury securities supporting the programs.
If crypto plumbing were ever to become entangled in core funding markets, through prime brokerage relationships, settlement networks or collateralized lending, emergency liquidity could flow to eligible financial institutions.
The Fed would not lend to the Bitcoin network. It would provide loans to banks and market companies that facilitate cryptocurrency trading and settlement.
The third path is regulatory rather than financial. Policymakers can reduce the chance of a crisis by changing the rules instead of deploying cash.
This includes making it easier for banks to broker stable currencies, clarifying reserve composition requirements or relaxing settlement restrictions to ensure smooth redemptions.
These actions do not involve taxpayer money, but they act as a form of “regulatory bailout.”
The irony that Bitcoin cannot escape
Bitcoin is designed to eliminate the need for trusted intermediaries and insulate money from government control.
Satoshi Nakamoto’s white paper cited the 2008 financial crisis as evidence that the existing system required too much trust. The protocol is designed to function without bailouts because it is not dependent on banks.
Fifteen years later, Bitcoin trades on centralized exchanges, is transacted through regulated intermediaries, and increasingly relies on stablecoins, backed by the same government bonds that anchored the financial system it was designed to replace.
If a crisis ever forces the government to intervene, it won’t be to save Bitcoin. It will be to save the institutions and markets that Bitcoin now depends on.
The bailout that Bitcoin can’t get is a taxpayer purchase. The bailout it could get is designed to protect everything else.