President Donald Trump said Sunday that he is directing his newly created digital assets working group to move forward on creating a “crypto strategic reserve” along the lines of existing U.S. reserves of gold and oil.
Yet details of the proposal left many observers frustrated, including some longtime Trump and crypto supporters. These critics say Trump’s reserve proposal features several other crypto tokens that are seen as much riskier assets, some of which also have private backers who could directly benefit from any investment by the U.S.
The announcement indicates Trump is forging ahead with a full-on embrace of the entire crypto industry, even as it pushes up against concerns about his own crypto interests. Trump already blurred those lines when he launched his own crypto meme coin immediately after taking office in January, and some experts now say his latest announcement shows he seems largely unfazed about the potential conflicts of having such a close relationship with a specific financial sector.
“Most people see this for what it is: An attempt to pump up crypto markets and benefit those who hold crypto, rather than benefit all Americans whose tax money could go toward more useful initiatives,” said Molly White, a digital asset researcher and sometimes crypto skeptic.
If Trump was looking to boost the crypto markets, it appears to have worked. The prices of many major cryptocurrencies (most notably those included in Trump’s post) jumped sharply in the aftermath of the announcement.
“I will make sure the U.S. is the Crypto Capital of the World,” Trump posted to Truth Social on Sunday.
A White House spokesperson referred a request for comment to an X post from “crypto czar” David Sacks, the man tapped by Trump to lead the creation of the reserve, in which he indicated that more details would come at a crypto summit set for Friday.
Trump first floated the idea of a reserve incorporating cryptocurrencies at last year’s annual Bitcoin Conference. Yet at the time, the assumption was that it would include only bitcoin.
The reserve idea emerged again in an executive order at the outset of his administration — yet the wording of the order indicated the proposed reserve could end up including more than just bitcoin, prompting an initial flurry of concerns.
Though all cryptocurrencies are inherently volatile, bitcoin is seen as relatively safer compared with other digital assets, given its enormous market cap and decentralized structure.
On Sunday, Trump stated on Truth Social that the strategic reserve may end up including tokens like ripple, solana and cardano — without mentioning bitcoin. It was only in a subsequent post that he said bitcoin — as well as ether, another token seen as having generally greater utility — would also be included.
Some voices in the crypto world reacted negatively to the idea of the proposed reserve roping in other cryptocurrencies besides bitcoin.
“Still forming an opinion on asset allocation, but my current thinking is: 1. Just Bitcoin would probably be the best option — simplest, and clear story as successor to gold 2. If folks wanted more variety, you could do a market cap weighted index of crypto assets to keep it unbiased,” Brian Armstrong, CEO of the cryptocurrency platform Coinbase, said Sunday in a post on X. “But probably option #1 is easiest.”
Jason Calacanis, a venture capitalist who appears on a podcast with Sacks, called the announcement a “Trump Pump” in a post on X Sunday, later posting that it represented an “insane grift.”
In addition to questions about whether Americans would stand to benefit from tokens that regularly see large price swings, some raised conflict-of-interest issues about official and unofficial Trump advisers benefiting from the world’s largest creditor serving as a backstop to their investments.
In particular, Sacks was an investor in Bitwise, a crypto asset investment group. He posted to X that he had sold his direct crypto holdings, as well as his position in Bitwise.
Sacks said on X early Monday: “I had a $74k position in the Bitwise ETF which I sold on January 22. I do not have ‘large indirect holdings.’ I’ll provide an update at the end of the ethics process.” (Special government employees like Sacks are subject to certain disclosure requirements and rules around conflicts of interest.) A representative for Sacks did not respond to a request for comment.
The firm of another unofficial Trump adviser, venture capitalist Marc Andreessen, was an early investor in ripple, though it was not immediately clear whether it still held an active position in it. And the group that backs ripple itself was one of the largest donors to Trump’s campaign.
A representative for the firm, Andreessen Horowitz, did not immediately respond to a request for comment. A representative for ripple referred a request for comment to a post on X made on Sunday by CEO Brad Garlinghouse.
“I’ve said this before — the crypto industry will achieve our goals (and beyond), IF WE WORK TOGETHER. Appreciate the crypto President @realDonaldTrump’s vision of a govt digital asset reserve representative of the industry,” Garlinghouse said, adding that bitcoin “maximalism” would be “the enemy of the industry’s progress” and that “we live in a multi-chain world.”
The crypto industry writ large ended up as the largest source of political donations during the 2024 presidential election campaign. Already, the industry has received clear signals that the administration would make good on promises to back off the Biden era’s general policy of regulating the industry via enforcement actions. In the past week, the Securities and Exchange Commission indicated it was dropping probes into exchanges it had accused of promoting unregulated securities.
Among the critics of Trump’s announcement was Joe Lonsdale, an ardent Trump supporter and co-founder of the defense group Palantir.
“Taxation is theft. It should be kept to a minimum,” he wrote on X. “It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes. Efficient defense, courts, national parks (should fund themselves), prisons, etc — fine. Cut it out with these schemes guys.”
While Lonsdale indicated he approved of the more lax regulatory approach the new administration is taking toward crypto, Trump’s latest announcement seems to have alarmed him.
“We can have better and clear regulations — and settle some things permanently in more fair ways with lawsuits and settlement agreements by the SEC, for example, if the industry wants to be clever — without unnecessary picking of winners and losers with tax dollars.”
Early Monday, Sacks responded to Lonsdale on X: “Nobody announced a tax or a spending program. Maybe you should wait to find out what’s actually being proposed.”
Though few details have been released about what will transpire at the “crypto summit” at the White House on Friday, it is likely to serve as another indicator that the administration’s championing of the industry shows no sign of slowing.
