Trump’s Crypto Reserve Proposal Sparks Debate Among Tech and Crypto Supporters
President Donald Trump’s recent announcement of a US Strategic Crypto Reserve has ignited a debate within the tech and crypto communities, particularly among some of his strongest supporters.
While many in the industry have applauded Trump’s pro-crypto stance, his decision to include multiple digital assets—beyond just bitcoin—has drawn criticism, exposing the first significant divide between the president and the tech entrepreneurs who backed him during the 2024 campaign.
In a Truth Social post on Sunday, Trump confirmed that the reserve would include bitcoin, ethereum, XRP, Solana’s SOL, and Cardano’s ADA. This move was framed as a way to bolster the US crypto industry and establish the country as a global leader in digital assets.
For months, many of Trump’s crypto backers had pushed for the idea of a bitcoin-only strategic reserve, arguing that it would serve as a digital equivalent of a gold reserve. Coinbase CEO Brian Armstrong supported the idea, stating that bitcoin is the “clear story as successor to gold.”
However, the inclusion of other cryptocurrencies raised concerns among industry leaders. Billionaire investor Tyler Winklevoss wrote:
“I have nothing against XRP, SOL, or ADA, but I do not think they are suitable for a Strategic Reserve. Only one digital asset in the world right now meets the bar, and that digital asset is bitcoin.”
Some crypto investors fear that a government-backed crypto reserve could distort the market. Critics argue that using taxpayer money to purchase volatile assets could unfairly benefit certain investors while exposing the public to financial risk.
Joe Lonsdale, founder of venture firm 8VC, was particularly vocal, writing:
“Taxation is theft. It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”
Similarly, tech investor Naval Ravikant cautioned against government intervention, warning that taxpayers “should not be exit liquidity for cryptocurrencies that are decentralized in name only.”
Some skeptics also questioned whether Trump’s crypto czar, David Sacks, played a role in shaping the plan. Sacks, who previously invested in various digital assets, denied any conflict of interest, stating that he had sold all of his holdings before taking office.
Following Trump’s announcement, the crypto market initially surged but quickly reversed course. Bitcoin fell by about 9%, while ether dropped 15%, with XRP and SOL experiencing even steeper declines. The downturn was compounded by Trump’s confirmation of forthcoming tariffs on Canada and Mexico, which spooked investors across financial markets.
Some analysts pointed out that crypto reserves differ from traditional strategic assets like gold or oil. Hilary Allen, a law professor at American University, argued that since crypto has no inherent backing, a government stockpile could artificially inflate prices and lead to volatility if the US were to sell its holdings.
Despite the criticism, some crypto leaders remain optimistic. Michael Saylor, chairman of MicroStrategy, described Trump’s plan as a “bullish” signal for the entire digital asset industry. Others, like Jonathan Jachym of Kraken, believe the announcement confirms Trump’s commitment to his campaign promises.
