Trump’s Crypto Reserve Plan Divides Industry
President Donald Trump’s announcement of a strategic cryptocurrency reserve has sparked a flurry of opinions across the digital asset landscape. While many within the crypto industry have largely welcomed Trump’s intention to bolster the sector, which faced increased regulatory scrutiny during the Biden administration, his recent proposal to include assets beyond bitcoin—the most valuable cryptocurrency—has caused some surprise and debate.
Anthony Pompliano, founder and CEO of the investment firm Professional Capital Management, characterized Trump’s plan as an “unforced error that will be regretted in the future.” Pompliano, despite potentially benefiting from the plan, voiced his criticism in a lengthy blog post. Trump, when revealing the details, asserted that the reserve would “elevate this industry after years of corrupt attacks by the Biden administration.” He indicated that the reserve would include XRP, SOL (Solana), and ADA (Cardano) in line with his Executive Order on Digital Assets.
Online users were swift to point out the omission of bitcoin from Trump’s initial statement, despite a previous pledge to establish a bitcoin strategic reserve last July. The president subsequently clarified, including BTC (bitcoin) and ETH (Ethereum) as essential components of the reserve. “I also love Bitcoin and Ethereum!” Trump added.
The specifics of how the reserve would function remain unclear. Crypto experts suggest possible mechanisms, including using assets seized from financial crimes or the government’s open market purchases. Pompliano argued that the U.S. historically maintains strategic reserves of assets such as gold and oil, which are essential to national strength. “Crypto tokens like ETH, SOL, XRP and ADA don’t fit that framework,” he said, comparing these tokens more to technology stocks than traditional commodities.
Cameron and Tyler Winklevoss, co-founders of the cryptocurrency exchange Gemini, have echoed the concerns about including currencies other than bitcoin in the reserve. The brothers, who both donated $1 million in bitcoin to Trump’s reelection campaign, support his stance on the industry. Tyler Winklevoss asserted that bitcoin is the only current digital asset meeting the requirements for a strategic reserve, requiring it to be hard money with proven value, like gold. His brother, Cameron Winklevoss, advocated for a bitcoin reserve, emphasizing its necessity for any country looking to increase self-sufficiency and reduce reliance on adversaries, similar to stockpiling rare earth minerals, gold, or oil, sooner rather than later.
Coinbase CEO Brian Armstrong suggested that bitcoin would “probably be the best option,” describing it as the “simplest and clearest story as a successor to gold.” However, Nic Carter, a founding partner at crypto investment firm Castle Island Ventures, doesn’t favor any kind of crypto reserve. Carter doesn’t believe that crypto falls into the well-being of the American citizen. “We don’t need bitcoin or any other crypto asset to trade at any specific price and we don’t have liabilities denominating those assets nor would it be difficult to acquire them if for some reason, we needed to extinguish such a liability.”
Carter warned about the potential disruption a reserve would pose to the dollar, even though he doesn’t believe the aim of the reserve is to create a new gold standard based on bitcoin. “I don’t see why we would disrupt ourselves, I think it throws global markets into upheaval again,” he said.
The divergent views set the stage for potential disagreements between the Trump administration and the crypto industry as discussions continue about the specifics of the plan. Serving as the primary spokesperson, David Sacks, Trump’s AI and crypto czar, responded to criticism. Joe Lonsdale, founder of 8VC and a known Trump supporter, cautioned via social media that “taxation is theft,” but Sacks reiterated that the administration hadn’t proposed any tax or spending programs.
A cryptocurrency summit with industry leaders is planned at the White House, where the finer points of the plan and the administration’s other crypto efforts may be unveiled. Some observers have suggested that the plan may not be as aligned with Trump’s efforts to lower government spending. Carter stated that using funds to do so would be politically unwise. “It’ll be seen as a bailout to already affluent crypto holders. And more than that, it’ll be seen as a pay-to-play for wealthy crypto entrepreneurs that maybe donated to Trump and helped him get elected. And then in return, are getting their assets included in the reserve.”
Further complicating matters is the potential conflict of interest surrounding Sacks. Charles Hoskinson, founder of Cardano, has expressed support for including XRP in the reserve. Sacks sold all his personal cryptocurrency holdings before beginning his role in a second potential Trump administration. Should a reserve be pursued through Congress, opinions in the crypto community may shift. Senator Cynthia Lummis (R-Wyo.) previously introduced a bill that would authorize the U.S. to acquire and hold crypto assets as a reserve.
