With inflation up and consumer sentiment down, working Americans don’t have much to celebrate after President Donald Trump’s first six weeks in office. Billionaires, however, couldn’t be more pleased with their return on investment. After handing the federal government’s keys and wallet to unqualified billionaire Elon Musk, Trump announced the creation of a “strategic” cryptocurrency reserve fund. On Friday, the president is hosting the who’s who of the crypto industry at a White House summit. The reserve would purchase crypto tokens with taxpayer dollars as a theoretical future source of emergency assets. In practice, it amounts to a massive giveaway to tech billionaires at Americans’ expense.
The crypto reserve is a dream come true for Trump’s oligarch donors, many of whom would benefit from this fund. Other strategic reserves — like the Strategic Petroleum Reserve and the Strategic National Stockpile — store valuable assets the U.S. may need in an emergency. But a crypto reserve has no value to anyone but the crypto industry. While Trump and Musk gut agencies that protect consumers and plan to take a chainsaw to Medicaid, tech billionaires are set to receive hundreds of billions in a direct transfer from American taxpayers.
Crypto’s inherent volatility and popularity with fraudsters and criminals make it, at best, a highly risky gamble for working people
Crypto is a grift in both theory and practice. Its backers promise high returns on a product that has no economic or real-world value. Because the price of crypto rises as the public’s interest in it does, crypto companies are prone to clever marketing that postures crypto as the magic solution to all that ails the U.S. economy. But many of these firms’ claims are misleading. In fact, crypto’s inherent volatility and popularity with fraudsters and criminals make it, at best, a highly risky gamble for working people interested in investing. At worst, it is the source of significant loss of wealth for millions of Americans and a risk to U.S. financial stability. And like many corporate schemes, crypto backers disproportionately prey on populations that have been locked out of more traditional wealth-building opportunities.
Outside of crypto’s inherent instability and the danger its volatility poses to the health of our financial system, this reserve is the latest addition to Trump’s lengthy list of conflicts of interest. Only this time, the growing cadre of tech-focused millionaires and billionaires that have his ear can benefit as well. Aside from Elon Musk, two of the most prominent names are venture capitalists David Sacks, Trump’s new crypto czar, and Marc Andreesen, who has helped staff the new administration.
Just look at the five cryptocurrencies included in the reserve: bitcoin, ether and XRP, plus the lesser-known SOL from Solana and ADA from Cardano. All five surged after the announcement, and all five are held by Bitwise, a crypto fund manager whose investors until recently included Sacks’ firm Craft Ventures. At the time Trump announced the reserve on Monday, Craft still listed Bitwise (and other crypto startups) in its portfolio. Only after the announcement did Craft Ventures update its website to say it had exited its investment in January.
Sacks has a track record of demanding taxpayer help: When Silicon Valley Bank (SVB) collapsed in spring 2023, Sacks — whose firm’s investment companies included clients of SVB — was was one of the first and most vocal advocates for a taxpayer-funded bailout above and beyond the FDIC’s guarantee on bank deposits. That bailout cost $22 billion. In the case of the run on SVB, at least, the crisis threatened to spiral and hurt the livelihoods of millions of working Americans. This time, though, Sacks and others are creating the very conditions for a future crypto crisis to spread.
Andreessen, in addition to advising the presidential transition and the so-called Department of Government Efficiency, has primed the Trump administration for an orchestrated crypto resurgence. His firm, Andreessen Horowitz, has invested billions in crypto ventures. Last year, Andreessen Horowitz donated tens of millions to pro-crypto super PACs ahead of the presidential election. Now that Trump is in office, he’s been on a media blitz, decrying crypto regulations as “sanctions.” When the scheme inevitably goes belly up, the government will then have a vested interest in bailing out the industry. And then there’s the classic Trump self-enrichment — the president and his sons, Don Jr., Eric and Barron, all hold positions at World Liberty Financial, a decentralized finance platform that bought millions of the same tokens Trump pumped in his Truth Social post, including bitcoin and ether. Last week, the Securities and Exchange Commission halted a civil fraud investigation into a crypto entrepreneur who had invested $75 million in World Liberty Financial. Most obviously, Trump’s crypto reserve is good for Trump, his family and his wealthy backers. But this move also endorses crypto as a safe investment for everyday Americans with the backing of the full faith and credit of the U.S. government. When the scheme inevitably goes belly up, the government will then have a vested interest in bailing out the industry. Proposing to use taxpayer funds to buy crypto at the same time that Elon Musk and Republicans in Congress try to cut vital programs like Medicaid, disaster relief and food assistance confirms yet again that Trump’s loyalties are not with the voters who elected him, but the billionaire donors who funded him. This crypto reserve, if created, would lay the groundwork for the largest bailout in history — with taxpayers footing the bill.
Emily DiVito
Emily DiVito is senior advisor for economic policy at Groundwork Collaborative. Prior to Groundwork, she was the director for finance, corporate regulation, and consumer protection at the Roosevelt Institute and a policy advisor at the Treasury Department. 
