One might think that virtually all Bitcoiners would be thrilled about the notion of the U.S. government acquiring BTC (and perhaps a basket of other cryptoassets) and effectively ratifying it as a global asset of consequence. However, I count myself among the few holdouts who don’t see the development as positive for either Bitcoin or the U.S. government itself. Here’s eight reasons why I don’t support the policy.
If Bitcoiners want a reserve to last, they should want Trump to seek Congressional authorization for a purchase (as is customary for any large outlay). If it is done solely by executive fiat, the next administration will not feel bound by the policy and could trivially reverse it (and nuke the market in the process). If Bitcoiners sincerely believe it benefits the U.S. to acquire bitcoin and hold it for a long period of time, then they would have no issue insisting that the government pass a law authorizing spending for the Reserve, rather than having Trump enact the policy unilaterally.
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The fact that many Bitcoiners are hoping that Trump makes the policy without asking Congress for approval shows that they are chasing a short-term pump, rather than actually being sincere about the long-term value of the Reserve for the U.S. A future Democratic administration will have no qualms about immediately divesting the Reserve.
The U.S. is the issuer of the global reserve currency. We still don’t know how the Crypto Reserve will be positioned – as simply an investment fund, or something more inherent to the dollar such as a new commodity-based currency system like the old gold standard.
If the Crypto Reserve is contemplated as providing a new backing for the dollar, I believe this will cause significant unease in dollar and Treasury markets. Effectively, the government will be signaling that it believes it no longer has faith in the dollar system as it currently exists, and a radical change is needed. I imagine that this would cause already-high rates to rise, as the market starts to wonder whether the U.S. is contemplating a default on its debt. The government should be focused on shoring up investors’ faith in its ability to sustain its debt obligations by pursuing pro-growth and deficit-reducing policies, not toying with the entire structure of the dollar system.
Many Bitcoiners don’t buy this line of reasoning and simply want to accelerate the collapse of the dollar. I view this as a kind of financial terrorism. I don’t believe in financial accelerationism nor do I think bitcoin – or any other cryptoasset – is ready to serve as the backing of a new commodity standard for the dollar.
American funds and individuals hold more Bitcoin than the citizens of any other country on the planet – almost certainly by a large margin. The U.S. government already benefits from this state of affairs. When Bitcoin goes up, those Americans who realize their gains owe taxes to the government – either 20% or 40% of their gains based on how long they have held the position.
This is a meaningful point not to be overlooked. The U.S. already benefits when Bitcoin goes up, through tax realizations – more than any other country. In light of this, do we really need to pick a massive fight and insist that the U.S. government gain direct exposure for these assets, too? No one is pushing for the U.S. government to acquire Apple or NVIDIA stock. Why Bitcoin?
Generally, assets and commodities that the U.S. acquires at the government level are things that might be required in a pinch, and have to be accumulated ahead of time. The Petroleum Reserve is a good example, as oil is clearly an essential commodity, and in a crisis, we might not be able to acquire all the oil that we need.
We also maintain reserves of other sorts of strategic assets, such as medical supplies and equipment, rare earth minerals, helium, metals like uranium and tungsten, and agricultural commodities. These all have a clear and obvious purpose: creating a reserve that can be dipped into in a time of emergency.
We also stockpile foreign FX, in case we need to make interventions into currency markets, although these interventions are increasingly rare. There is no obvious strategic use for bitcoin (and certainly not Cardano or Ripple). Ordinary Americans do not need a “supply” of bitcoin or any other cryptoasset to support their quality of life. This might change if the entire financial system runs on a blockchain and we need the tokens for gas (the one analogous “industrial” use I could think of), but that’s not the state-of-play today. The only “strategic” use for bitcoin is simply going “long” the asset at the state level and selling it later, but you could accomplish this with any other financial asset. There’s nothing unique about bitcoin (or any other cryptoasset) in this regard.
Of course, if you’re going to ultimately back the dollar with bitcoin in some kind of neo gold standard, then it would have a strategic use (in which case you should refer back to point #2). But I don’t think that is the intent right now.
Mixing Bitcoin in with rival cryptoassets Ethereum, Cardano, Solana, and XRP and giving them all an equal government imprimatur devalues Bitcoin and makes it look undifferentiated from these assets. Bitcoin is the only one of the bunch with a credible supply schedule and genuine decentralization at the protocol level. A crypto reserve confuses the issue and devalues Bitcoin in the public eye. Principled Bitcoiners should push for an all-or-nothing approach; either just Bitcoin, or no reserve.
I wonder what early libertarian Bitcoiners from 2012-16 would think of 2025 Bitcoiners pushing for the government to backstop the value of their coins. Beyond the confusing ideological evolution that the Bitcoin community has undergone, another point remains. Bitcoin has been one of the best performing investments in history, monetizing from nothing in 2009/10 to trillions of dollars in aggregate value in 2025. It has done all of this without government support, and, indeed, in many cases, despite overt hostility from powerful nation-states. A Crypto Reserve would transform bitcoin from an apolitical asset into the plaything of the government, subject to Washington’s political cycles. Bitcoiners were never ones to hitch their wagon to the government, and they shouldn’t start now.
Only a fraction (somewhere between 5-20%) of Americans own bitcoin, and even fewer own other cryptoassets. Many Bitcoiners are extremely wealthy due to their historical investments in the coin and others. At a time when government spending is under the microscope, using taxpayer dollars – regardless of how mechanically they are apportioned – to bolster the price of Bitcoin and other cryptoassets will be politically unpopular. Biden’s proposed student loan amnesty was met with great resistance, despite potentially applying to 43 million borrowers. Bitcoiners are a smaller bunch and even less in need of financial support from the government. This policy would undoubtedly cause an unnecessary backlash in broader society against the crypto community.
It’s no secret that Trump and his cabinet and inner circle have ownership in various cryptoassets. Trump himself has launched, or is affiliated with: an NFT project built on ETH, more than one memecoin built on Solana, and, of course, World Liberty Financial which holds an array of crypto assets. What we need from Trump is reasonable crypto policy, and based on his appointments at Treasury, Commerce, SEC, CFTC, OCC and others, it looks like he is delivering that.
However, using government resources to directly increase the value of coins that Trump (and many in his inner circle) hold leaves a sour taste. Most of us in the crypto industry have simply been asking for reasonable policy and fair rules of the road so that we can do business in the U.S. Trump is proposing going much further than this and using taxpayer dollars to speculate on the coins themselves, potentially enriching himself and his associates.
To Trump’s critics, this appears corrupt. It also makes the remainder of Trump’s pro-crypto policymaking and regulatory efforts look self-interested, rather than letting it stand on its own as good policy. A future administration could choose to throw the baby out with the bathwater, reversing all the progress the U.S. has made on crypto. The existence of the Reserve gives future regressive efforts an easy moral justification.
