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CNN
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When President Donald Trump addresses the nation from Capitol Hill on Tuesday, he’ll get the first opportunity to sell Americans and Congress on his new proposal that the US needs to create a strategic reserve of cryptocurrency.
It’s a plan – unveiled Sunday in a pair of social media posts more than an hour apart – that will raise obvious questions of conflict of interest, both for Trump and his crypto czar, and could also feed into a brewing conspiracy about Fort Knox.
The first post mentioned three smaller and lesser-known cryptocurrencies – XRP, solana and cardano, temporarily spiking their prices.
More than an hour later, he added that the largest and best-known cryptocurrencies, bitcoin and ether, would also be involved.
Trump has been talking for a while about creating such a reserve, part of his pledge to make the US the “Crypto Capital of the World.” Beyond the policy aspect of crypto, he also has a personal interest.
The company that owns Trump’s social media network, and where Trump is the largest shareholder, recently made clear its plans to invest $250 billion in the cryptocurrency industry.
Separately, the Securities and Exchange Commission last week dropped a civil fraud case against Justin Sun, a Chinese businessman who pumped $75 million into a crypto token that could benefit Trump’s family down the road. As CNN’s Allison Morrow noted at the time, it’s a 180 for the agency since the Biden administration, which was working to regulate cryptocurrency.
The value of cryptocurrencies like bitcoin surged after Trump’s election, but have stalled in recent weeks. Yet Trump’s move away from regulation is exactly what libertarian-minded tech billionaires who backed his campaign want.
Trump appointed one of them, David Sacks, to be a crypto and AI czar in his administration. While Sacks has not released a financial disclosure and the terms of his employment are not clear, after Trump’s posts about a strategic reserve spiked the value of cryptocurrencies, Sacks said on X that he had sold all of his cryptocurrency before joining the administration. His firm Craft Ventures, however, is invested in Bitwise, an asset manager that offers crypto index funds.
Evangelists for a cryptocurrency reserve say that the US taking a bold position in bitcoin could pay down the national debt at some point in the future.
The investor Michael Saylor, who said his company MicroStrategy has more than $50 billion worth of bitcoin, said on CNBC Monday that if the US buys 10 to 20 percent of the world’s bitcoin network for a long time – decades or more – it would eventually be worth many trillions of dollars.
“What’s compelling about it is if the United States takes a position in the emerging crypto economy – if it buys up 10, 20% of the bitcoin network, we’re going to pay off the national debt, so why wouldn’t that be in the interest of the United States?”
But for every bitcoin evangelist, there is an academic or banker from across the political spectrum who will point out that cryptocurrency investments might just as easily go up in smoke, which would be an unfortunate thing to happen to taxpayer dollars.
Trump has argued the US can simply take the more than 200,000 bitcoin it currently has seized through criminal and civil actions and start building from there.
There are other proposals, like the one from Sen. Cynthia Lummis, a Wyoming Republican, to reallocate money from the Federal Reserve to buy up bitcoin or to leverage the US government’s gold reserves to raise funds for the bitcoin reserve.
Both Trump and Musk have talked recently about planning a trip to Fort Knox to make sure the gold is still there, feeding a conspiracy theory. During Trump’s first administration, CNN used a public records request to obtain photos of then-Treasury Secretary Steven Mnuchin and former Senate Majority Leader Mitch McConnell posing with gold bricks in the vault. McConnell even wrote his name on the wall.
It’s not clear there will be an appetite in Congress for tinkering with the gold reserve or otherwise spending taxpayer money to buy up bitcoin, but there will be an opportunity for insiders to talk about it when Trump and Sacks host a Crypto Summit on Friday at the White House for “prominent founders, CEOS, and investors from the crypto industry.”
Sen. Patty Murray, a Washington Democrat, complained on X that Trump should not be looking to invest Americans’ money in bitcoin at the same time he is trying to cut the size of government.
“While he chokes off cancer research and fires VA researchers, the President is using your taxpayer dollars to buy crypto and enrich his personal allies,” she said.
