President Donald Trump announced Sunday that he’d include select cryptocurrency tokens in a “U.S. Crypto Reserve” — but what that actually means, and whether it will actually happen, is just about as clear as mud.
In a TruthSocial post, Trump said he’d directed his advisers to “move forward” on creating a “Crypto Strategic Reserve,” and that it would include the cryptocurrencies XRP, Solana, and Cardano. In a follow-up post, he added that Bitcoin, Ethereum, and “other valuable Cryptocurrencies will be at the heart of the Reserve.”
Naturally, the announcement sent crypto prices — which had been trending downward since Trump’s inauguration — shooting higher on Sunday, particularly among the specific tokens Trump named. But some of the market enthusiasm wore off on Monday as questions deepened about what Trump’s announcement actually meant and whether it would be meaningful.
The announcement also set off alarm bells from those concerned about corruption and cronyism. Not only did Trump seem to suggest government plans to favor an industry some of his top supporters have heavily invested in, but he called out specific cryptocurrencies, including some lesser-known ones, by name.
How exactly did he come up with that list? And was he proposing to spend taxpayer money not only on buying crypto, but on picking favorites in the market, to make his allies richer?
Even some Trump fans weren’t on board with that idea. Libertarian venture capitalist Joe Lonsdale complained on X that “it’s “wrong to tax me for crypto bro schemes,” adding, “cut it out with these schemes guys.”
“Nobody announced a tax or a spending program,” David Sacks, the White House adviser for AI and crypto, soon fired back, adding: “Maybe you should wait to find out what’s actually being proposed.”
But it remains very unclear what, exactly, is being proposed.
What is a “strategic crypto reserve?” It depends who’s talking about it.
The background here is that some crypto backers have been pushing this idea for a US crypto reserve for some time, hoping it would give the stamp of government approval and legitimacy to an industry often associated with speculation, money laundering, and either criminal activity — as well as, of course, juicing prices.
One version of that proposal would amount to law enforcement agencies simply holding onto crypto they’ve seized from criminals rather than selling it — an idea Trump backed last July.
But another more ambitious and controversial version would involve the government actually buying a whole lot of crypto itself, perhaps through the Federal Reserve.
Is Trump talking about one of those, the other, or something in between? And what does he have the power to do via executive action rather than legislation?
Details remain scant, though more may come at a White House crypto summit Friday.
The summit will be chaired by Sacks, a venture capitalist and close ally of Elon Musk who was one of several major tech figures to endorse Trump in the middle of last year — hence his appointment to the White House “AI and crypto czar” post.
Sacks — a pugnacious online presence — was roundly criticized on social media this weekend due to the perception that he was steering crypto policy to make himself and his friends richer. Sacks was an early backer and major investor in Solana, one of the lesser-known cryptocurrencies named by Trump for inclusion in the reserve.
Sacks said on social media Sunday that he had sold all his cryptocurrency holdings before he joined the administration.
The Financial Times reported, though, that Sacks’s investment firm still had stakes in some crypto start-ups. His White House ethics paperwork has not yet been made public.
