On Sunday, President Donald Trump announced plans to theoretically deliver on a promise to Silicon Valley cryptocurrency whales who backed him with millions in Super PAC donations during his 2024 run. In order to “make sure the U.S. is the Crypto Capital of the World,” and as an extension of an executive order supporting the growth of digital assets, he wrote in a post on Truth Social, his administration intends to move forward with the creation of a “U.S. Crypto Reserve.” The stockpile, he noted, would include the well-known currencies Bitcoin and Ethereum, along with the tokens XRP, Solana, and Cardano.
While it’s not known exactly what form such a strategic reserve would take, nor whether the government would seek to buy crypto for the stockpile with taxpayer dollars — a move that would theoretically require approval from Congress — blockchain enthusiasts cheered the news. Currencies that had rallied since Trump’s election only to start slipping in recent weeks once again climbed sharply, with Bitcoin surging 10 percent.
But the pump was short-lived, as Trump on Monday announced that harsh tariffs on goods imported from Canada and Mexico were imminent. That news caused huge losses on Wall Street, and crypto tokens also saw their gains of the day prior immediately erased. As of Monday afternoon, Bitcoin, Ethereum, Solana, and XRP all stood where they did before Trump teased the strategic reserve, while Cardano had shed about 20 percent of its peak value.
Even before these plunges, commentators questioned the supposed benefits of a national crypto stockpile. Some in the industry were perturbed that the White House is apparently looking to include more volatile currencies among the holdings. (Trump had only added that Bitcoin and Ethereum would be among the reserve’s assets in a follow-up post to his original announcement, as if to quell alarm.) Economists have described the crypto reserve idea as a boon to crypto investors but a risk to average taxpayers. A few journalist critics described it as outright corruption in that sense — seeing as Trump’s crypto czar, tech venture capitalist and Elon Musk associate David Sacks, held stakes in the five currencies Trump named on social media.
Sacks defended himself on X, sharing part of a Financial Times report that he and his firm Craft Ventures had sold their direct cryptocurrency holdings “soon after Trump’s inauguration,” although the article notes that Craft still has stakes in several crypto startups. Sacks claimed that he had indeed liquidated his Bitcoin, Ethereum, and Solana, though he differed somewhat on the timeline, writing that he had unloaded these tokens “prior to the start of the administration.” (A Community Note on the post points out that Craft is an investor in the asset management firm Bitwise, whose CEO on Sunday revealed that their top five positions were in the same five tokens mentioned by Trump.)
Sacks, whose government ethics review is ongoing, also pushed back against Joe Lonsdale, another wealthy VC Trump backer in Silicon Valley, who had reacted negatively to Trump’s crypto stockpile statement by writing on X: “Taxation is theft. It should be kept to a minimum. It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.” Sacks replied, “Nobody announced a tax or a spending program. Maybe you should wait to find out what’s actually being proposed.”
One problem with trying to correct others on details of a hypothetical reserve is that none have been made public besides the potential mix of assets. Even among crypto traders, there is a certain skittishness about the notion of the federal government acquiring more Bitcoin with Treasury funds, which could prove disastrous if the digital currency were to nosedive. An alternative that has some support would be for the U.S. to stockpile the billions in Bitcoin it has seized through law enforcement operations instead of continuing to sell it off, though this presents other logistical issues. The White House is set to host its first-ever crypto summit on Friday, with Sacks indicating on his official government X account that the event would bring together “prominent founders, CEOs, and investors from the crypto industry.”
Meanwhile, there is an inescapable sense of crooked dealings where the MAGA regime and the cryptocurrency markets overlap. The Trump family’s first crypto venture, World Liberty Financial, was founded in 2024 and soon drew the interest of a major Chinese crypto entrepreneur, Justin Sun. The Securities and Exchange Commission sued Sun in 2023 on charges that his companies Tron and Rainberry (formerly BitTorrent) fraudulently manipulated crypto markets and paid celebrities including Lindsay Lohan, Jake Paul, and rapper Soulja Boy to illegally promote tokens without disclosing they had received compensation for doing so. But last week, after Sun had amassed a stake of $75 million in World Liberty Financial tokens, the Trump SEC moved to pause the fraud case against Sun. According to the project’s fine print, the Trumps stand to claim 75 percent of the revenue from those tokens.
And right before the president’s January inauguration, the Trump team launched two so-called meme coins, $TRUMP and $MELANIA (after the First Lady), which were rife with ethical problems, irked industry leaders who felt they undermined the legitimacy of crypto, and caused supporters to lose billions while the Trumps reaped tens of millions in fees. Meme coins have no intrinsic value or use and, as the name suggests, are based on cultural personalities and trends, with investors attempting to drive up prices through cycles of viral hype.
Though it wasn’t floated for inclusion in a national stockpile, $TRUMP made gains following the reserve announcement but just as quickly plummeted to earth.”
Last week, Sacks called attention to new guidance on such assets from the SEC, which saw the departure of many top officials, as commissioner Mark Uyeda, a crypto-friendly Republican, was promoted to acting chairman.
“Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation,” reads the Feb. 27 staff statement from the regulator’s Division of Corporation Finance. “In this regard, meme coins are akin to collectibles.” As such, the division asserts, meme coin offerings are not subject to federal securities laws, the transactions do not have to be registered with the SEC, and “neither meme coin purchasers nor holders are protected” by laws enforced by the agency. The statement further notes, “The offer and sale of meme coins does not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.”
The position laid out here would obviously shield Trump from any sort of liability where it comes to buyers burned by $TRUMP or $MELANIA — not that he needs more protection as the sitting president. Still, it’s a stark indication of how federal agencies purged of career employees have sought to turn a blind eye to conflicts of interest for Trump and his tech billionaire cronies. It won’t be much of a surprise if the forthcoming crypto reserve is structured to their advantage as well.
