On Sunday, President Donald Trump stated that he is instructing his newly established digital assets working group to advance the creation of a “crypto strategic reserve,” similar to the U.S. reserves of gold and oil.
However, many observers, including some dedicated Trump and cryptocurrency supporters, expressed frustration over the details of the proposal. Critics argue that Trump’s reserve plan includes several other cryptocurrencies considered to be riskier assets, with some having private investors who could directly benefit from any U.S. investment.
This announcement suggests Trump is fully embracing the cryptocurrency industry, despite concerns regarding his own crypto interests. He previously blurred these lines by launching a crypto meme coin shortly after taking office in January, and experts now suggest he appears largely unconcerned about potential conflicts arising from his close ties to a particular financial sector.
“Most people view this as what it is: A move to boost crypto markets and benefit those holding cryptocurrencies, rather than serving all Americans whose tax money could be directed towards more beneficial initiatives,” stated Molly White, a digital asset researcher and occasional crypto skeptic.
If Trump’s intention was to elevate the crypto markets, it seems he has succeeded. The prices of several major cryptocurrencies, particularly those mentioned in Trump’s announcement, surged significantly following the news.
“I will ensure the U.S. becomes the Crypto Capital of the World,” Trump shared on Truth Social on Sunday.
A spokesperson from the White House directed requests for commentary to a post by David Sacks, designated by Trump to lead the creation of the reserve, indicating that further details would be shared during a crypto summit scheduled for Friday.
Trump originally suggested the idea of a reserve encompassing cryptocurrencies at the previous year’s annual Bitcoin Conference. However, at that time, it was presumed it would consist solely of bitcoin.
The reserve concept reappeared in an executive order at the beginning of his administration, but the language of the order signaled that the proposed reserve could potentially include more than just bitcoin, raising initial concerns.
While all cryptocurrencies are inherently volatile, bitcoin is regarded as relatively safer compared to other digital assets due to its substantial market cap and decentralized nature.
On Sunday, Trump mentioned on Truth Social that the strategic reserve may include tokens such as ripple, solana, and cardano, without initially referencing bitcoin. It was only later that he added bitcoin—and ether, another token often viewed as having greater utility—would be part of the reserve.
Reactions within the crypto community to the inclusion of other cryptocurrencies aside from bitcoin were mixed.
“I’m still formulating an opinion on asset allocation, but my current take is: 1. Just Bitcoin might be the best option — it’s simple, and clearly tells the story as the successor to gold. 2. If people seek more diversity, a market cap weighted index of crypto assets could be used to remain unbiased,” noted Brian Armstrong, CEO of the cryptocurrency platform Coinbase, in a post on X. “But option #1 is likely the easiest.”
Jason Calacanis, a venture capitalist who collaborates with Sacks on a podcast, referred to the announcement as a “Trump Pump” in a post on X Sunday, later adding that it exemplified an “insane grift.”
Concerns were raised not only about whether American citizens would benefit from tokens that routinely experience significant price fluctuations, but also regarding potential conflicts of interest involving both official and unofficial Trump advisors potentially profiting from the world’s largest creditor backing their investments.
In particular, Sacks had invested in Bitwise, a crypto asset investment firm. He later posted on X that he had divested his direct crypto holdings and his position in Bitwise.
Sacks stated on X early Monday: “I sold my $74k position in the Bitwise ETF on January 22. I do not have ‘large indirect holdings.’ I’ll provide an update once the ethics process concludes.” (Special government employees like Sacks are required to adhere to specific disclosure rules and conflict of interest regulations.) A representative for Sacks did not respond to a request for a comment.
The firm of another unofficial Trump advisor, venture capitalist Marc Andreessen, was an initial investor in ripple, though it remains unclear if they currently hold an active stake. Additionally, the organization backing ripple was one of the top contributors to Trump’s campaign.
A representative from Andreessen Horowitz did not respond promptly to a request for comment. A representative for ripple directed inquiries to a post made on X by CEO Brad Garlinghouse on Sunday.
“I’ve reiterated before — the crypto industry will meet our objectives (and beyond), IF WE COLLABORATE. I appreciate the crypto President @realDonaldTrump’s vision for a government digital asset reserve representing the industry,” Garlinghouse commented, adding that bitcoin “maximalism” would be “detrimental to the industry’s advancement” and that “we exist in a multi-chain world.”
The cryptocurrency sector ultimately emerged as the largest source of political contributions during the 2024 presidential election cycle. The industry has already received clear indications that the administration intends to uphold its promise to reverse the Biden era’s strategy of regulating the sector through enforcement actions. Recently, the Securities and Exchange Commission indicated it would be ending investigations into exchanges it had accused of promoting unregulated securities.
Among the critics of Trump’s announcement was Joe Lonsdale, a staunch Trump supporter and co-founder of the defense firm Palantir.
“Taxation is theft. It should be kept minimal,” he commented on X. “It’s wrong to appropriate my funds for leftist grifts; it’s equally wrong to tax me for crypto schemes. Efficient defense, judiciary, national parks (should be self-sufficient), prisons, etc — worthy endeavors. Let’s cut out these schemes, folks.”
While Lonsdale expressed approval of the more lenient regulatory stance the new administration is adopting regarding crypto, Trump’s latest announcement seems to have concerned him.
“We can establish better and clearer regulations — and settle many issues more equitably through legal actions and settlements with the SEC, for instance, if the industry is clever — without unnecessarily choosing winners and losers using taxpayer dollars.”
On Monday morning, Sacks responded to Lonsdale on X: “No one announced a tax or a spending initiative. Perhaps you should wait to hear the actual proposals.”
While few specifics have been released regarding what will happen at the “crypto summit” at the White House on Friday, it is likely to further demonstrate that the administration’s support for the industry shows no signs of waning.
