Shiba Inu Drops 6.9% After U.S. Treasury Bitcoin Update

Shiba Inu (SHIB) fell 6.9% in the last 24 hours as of 12:54 p.m. ET, continuing a short-term downtrend in the cryptocurrency market. The decline occurred alongside modest losses in major U.S. equity indexes, including the S&P 500 and Nasdaq Composite, reflecting broader market caution.

The pullback comes after statements from U.S. Treasury Secretary Scott Bessent, which tempered expectations that the federal government would actively purchase Bitcoin to expand its strategic reserve.

Treasury Will Not Buy Additional Bitcoin

On Fox Business, Secretary Bessent clarified that the U.S. government will not be acquiring new Bitcoin. Instead, the federal reserve of Bitcoin will be constructed from coins already seized in legal actions, and the government intends to halt sales of these holdings. 

Bessent said:

We've also started to get into the 21st century, a Bitcoin strategic reserve. We're not going to be buying that, but we're going to use confiscated assets and continue to build that up. We're going to stop selling that.

While the policy ensures that confiscated Bitcoin remains off the market, traders who anticipated fresh purchases expected a short-term boost in demand, which did not materialize. This led to selling pressure on Bitcoin and, by extension, on altcoins like Shiba Inu.

Altcoins, Including Shiba Inu, Drop After Bitcoin Falls

Shiba Inu, a meme-inspired cryptocurrency, is particularly sensitive to Bitcoin’s price movements. As the largest cryptocurrency by market capitalization, Bitcoin often sets the tone for the broader market.

When Bitcoin declined in response to Treasury news, traders sold high-risk altcoins, including SHIB, to reduce exposure. This reaction demonstrates the interconnectedness of crypto assets and the strong influence of market expectations on speculative coins.

Shiba Inu’s Value Lacks Real-World Utility

Unlike Bitcoin or Ethereum, Shiba Inu lacks a significant underlying utility. Its value is primarily driven by community hype, social media trends, and speculative trading.

Experts caution that investing in SHIB carries higher risk, and its price can fluctuate sharply without clear market fundamentals. For investors seeking more stability, established cryptocurrencies or projects with real-world applicationsmay be more suitable.

How Treasury Policy and Bitcoin Prices Affect Shiba Inu

• Policy impact: U.S. Treasury announcements can directly affect investor sentiment and altcoin prices.

• Volatility: Meme coins like SHIB are extremely volatile, making timing and risk management crucial.

• Diversification: Focusing on coins with proven use cases or established networks can help mitigate risk.

• Market psychology: Crypto markets often react to news and expectations, sometimes independently of broader economic trends.

Shiba Inu Market Highlights

• Shiba Inu fell 6.9% following Bitcoin’s decline after U.S. Treasury confirmed no new Bitcoin purchases.

• Treasury policy: The government will retain confiscated Bitcoin for its strategic reserve and halt sales, but will not buy additional coins.

• Altcoin sensitivity: Shiba Inu and other altcoins dropped in tandem with Bitcoin, reflecting market volatility tied to policy announcements.

• Investment note: SHIB remains highly speculative; investors may consider focusing on cryptocurrencies with established networks or tangible use cases.

Also Read: Crypto and Private Equity Now Eligible for 401(k) Investments