Why Shiba Inu Is Sinking Today

Key Points

• Treasury Secretary Scott Bessent appeared on Fox Business and confirmed that a Bitcoin Strategic Reserve would be made up of seized assets only.
• Investors had been hoping the federal government would purchase Bitcoin from the open market and drive prices up.
• As is often the case, altcoins followed the direction of Bitcoin, and many more speculative coins like Shiba Inu fell even harder.
• 10 stocks we like better than Shiba Inu ›

The cryptocurrency Shiba Inu (CRYPTO: SHIB) is falling today, down 6.9% in the last 24 hours as of 12:54 p.m. ET. The leg down comes as the S&P 500 and Nasdaq Composite were both down modestly.

U.S. Secretary of the Treasury Scott Bessent sent Bitcoin lower after he confirmed the federal government would not look to buy Bitcoin to add to its strategic reserve. The rest of the crypto market followed.

No additional Bitcoin according to Bessent

On Fox Business this morning, Secretary Bessent said the government has no plans to buy additional Bitcoin for its strategic reserve. Instead, he confirmed it will build the reserve from coins already seized in law enforcement actions and stop selling those 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.

Image source: Getty Images. The fact that the government will hold those assets it has seized and not sell them is certainly helpful for Bitcoin's price, but some investors were hopeful the Trump administration would go one step further and start purchasing Bitcoin in earnest, creating demand pressure. Traders who had bet on fresh government buying sold the news, sending Bitcoin down and pulling altcoins like Shiba Inu with it.

Shiba Inu is a speculative asset

While meme coins like Shiba Inu can be fun, they shouldn't be taken as investments. For those who are interested in crypto investing, I would stick to the top dogs like Bitcoin and Ethereum or look for projects with real utility.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Why Shiba Inu Is Sinking Today was originally published by The Motley Fool

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