President Trump’s plan for a strategic crypto reserve has stirred mixed feelings within the cryptocurrency industry.
The digital assets space has largely welcomed Trump’s mission to boost the industry, which faced heavy regulatory scrutiny under the Biden administration.
But his recent announcement to form a cryptocurrency reserve with assets other than bitcoin — the most valuable cryptocurrency — surprised even those who could benefit from the plan.
Anthony Pompliano, founder and CEO of investment firm Professional Capital Management, called the suggested plan an “unforced error that will be regretted in the future.”
Pompliano noted in a lengthy blog post that his criticism comes even as “someone who stands to substantially benefit financially” from Trump’s announcement.
Trump on Sunday offered new details about a crypto reserve, writing online that it will “elevate this industry after years of corrupt attacks by the Biden administration.”
“Which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL [Solana] and ADA [Cardano],” Trump wrote on Truth Social.
Online users were quick to point out his post made no mention of bitcoin, despite a pledge he made last July to create a strategic bitcoin reserve.
The president clarified a few minutes later and wrote, “And, obviously BTC [bitcoin] and ETH [Ethereum], as other valuable cryptocurrencies, will be at the heart of the Reserve.”
“I also love Bitcoin and Ethereum!” Trump added.
Trump did not explain how the reserve would work, though crypto experts told The Hill it could happen either by using assets seized by federal law enforcement while disrupting financial crimes — as Trump’s crypto executive order suggests — or by having the U.S. government buy the assets on the open market.
“The United States is not in the business of buying stocks or other investment assets,” Pompliano argued. “The U.S. has strategic reserves of assets like gold, oil, cheese and other assets that are important to the strength of our balance sheet or have national importance.”
“Crypto tokens like ETH, SOL, XRP and ADA don’t fit that framework,” he continued, suggesting the tokens are more like technology stocks rather than natural commodities or hard money.
Cameron and Tyler Winklevoss, the co-founders of cryptocurrency exchange Gemini, echoed the sentiment against any reserve that includes currencies other than bitcoin. The brothers each donated $1 million in bitcoin to Trump’s reelection campaign due to his support for the industry.
Tyler Winklevoss said on Monday bitcoin is the only digital asset in the world that currently meets the bar for a strategic reserve, writing an “asset needs to be hard money that is a proven value like gold.”
Cameron Winklevoss also advocated for a bitcoin reserve, calling it a “must.”
“Like rare earth minerals, gold, oil, etc., any country needs to stockpile these resources to increase self-sufficiency and reduce leverage of its adversaries,” Cameron Winklevoss wrote. “Stockpiling sooner rather than later and before other countries is much better in terms of the price you pay.”
Coinbase CEO Brian Armstrong added he believes bitcoin would “probably be the best option,” writing, “simplest and clear story as successor to gold.”
Still, some industry players oppose a crypto reserve of any kind.
“Crypto doesn’t fall into the category for the well-being of the American citizen,” said Nic Carter, a founding partner at crypto investment firm Castle Island Ventures. “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.”
“I don’t understand how there’s any strategic purpose of these,” he added.
While he does not believe the goal of a reserve is to build a new gold standard built on bitcoin as the underlying asset, Carter warned this would be “tremendously disruptive to the nature of the dollar.”
“I don’t see why we would disrupt ourselves, I think it throws global markets into upheaval again,” Carter said.
The debate is setting the stage for one of the first notable disagreements between the Trump administration and crypto industry as questions swirl over the specifics of the plan.
Amid blowback online, Trump’s artificial intelligence (AI) and crypto czar David Sacks has acted as the primary spokesperson for this plan.
“Taxation is theft,” Joe Lonsdale, founder of the venture firm 8VC and known Trump supporter, wrote in a post on the social platform X. “It should be kept to a minimum. It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”
Sacks snapped back at Lonsdale, writing, “Nobody announced a tax or a spending program. Maybe you should wait to find out what’s actually being proposed.”
The White House is expected to host a cryptocurrency summit involving industry figures Friday, during which details about the plan and the administration’s other crypto-oriented efforts may be announced
It is not clear how taxpayers could be impacted, but some observers suggested the prospect contradicts Trump’s other efforts to cut down on government spending and bureaucracy.
“It’s extremely politically imprudent to use those newly freed up funds to purchase crypto,” Carter said. “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.”
This could make matters more complicated for industry figures like Cardano founder Charles Hoskinson, who revealed late last year that Ripple made a $5 million XRP pledge to Trump’s inaugural committee.
Hoskinson backed Trump’s talk of adding XRP to the reserve, calling the digital asset a “great technology” and a “global standard.”
Sacks, a general partner at venture capital firm Craft Ventures, is already facing allegations of a potential conflict of interest in the wake of the reserve announcement.
The AI and crypto czar maintains he sold all his personal cryptocurrency holdings ahead of the start of the second Trump administration.
Holdouts in the crypto community may change their minds if a reserve is pursued through Congress. Sen. Cynthia Lummis (R-Wyo.) introduced a bill last session proposing that the U.S. purchase crypto assets and hold it as a reserve.
“It’d be far more politically acceptable, both to folks in crypto and Americans in general, if it were done in a democratic way with congressional authorization,” Carter said, noting opinions across the industry still vary.
