Warren Demands No Bailouts as Bitcoin Craters Nearly 60%
On February 18, 2026, U.S. Senator Elizabeth Warren formally requested that the Treasury Department and the Federal Reserve confirm they will not use taxpayer funds to support cryptocurrency investors. In a letter addressed to Treasury Secretary Scott Bessent and Fed Chair Jerome Powell, Warren highlighted the market turmoil that has erased nearly 60% of bitcoin's value since its October high, arguing against intervention.
The letter draws a clear line, warning that a bailout "would be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires." Warren's move establishes significant political pressure to let market forces play out, removing any perceived government safety net and reinforcing the sector's high-risk classification for investors.
Trump-Linked Firm Sells Bitcoin to Repay $11.75M Debt
Warren's letter specifically pointed to the cascading liquidations of leveraged positions amplifying the market sell-off. She referenced World Liberty Financial, a crypto company co-founded by Donald Trump, which recently sold approximately 173 wrapped Bitcoin. The sale was executed to repay an $11.75 million debt in USDC stablecoins, a move that allowed the firm to avoid liquidation as Bitcoin’s price fell below $63,000.
This event underscores the precariousness of highly leveraged players in the current downturn. The letter also noted the substantial paper losses incurred by major industry figures. Michael Saylor's Strategy Inc. has seen its shares fall nearly 20% year-to-date, while Binance founder Changpeng Zhao and Coinbase's Brian Armstrong have reportedly lost nearly $30 billion and $7 billion, respectively.
Regulatory Scrutiny Intensifies Over Market Instability
Senator Warren's communication signals a broader push for stricter oversight and consumer protections within the crypto space. Citing a record $17 billion lost to crypto fraud and theft in 2025, she urged the financial agencies to strengthen safeguards for retail investors. The letter also highlighted a recent congressional hearing where Secretary Bessent gave what Warren described as a deflected answer when asked if taxpayer money would be deployed into crypto assets.
By explicitly stating that federal agencies "must refrain from propping up Bitcoin," Warren is advocating for a hands-off approach that forces the industry to manage its own risks. For investors, this reinforces that digital assets operate outside the traditional financial system's protections, making them solely responsible for absorbing any losses from market volatility.
