There’s a robust correlation between Elon Musk, President Donald Trump, and crypto bros. So you can think about the bros’ elation on Thursday when Trump introduced a nationwide “bitcoin reserve,” funded by bitcoin and different cryptocurrencies taken in federal authorities seizures.
One wrinkle: Trump’s “crypto czar” (and Musk lackey) David Sacks wrote on X, “The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime.”
The expectation in crypto circles had seemingly been that the federal authorities would purchase bitcoin to populate a nationwide reserve, similar to it buys oil for its petroleum reserves—which, due to the facility of provide and demand, would increase the worth of bitcoin (and different currencies). However saying the federal government wouldn’t make further purchases has led to a sharp drop in crypto costs.
The proposal isn’t all unhealthy for the bros. Sacks introduced that the federal government would merely maintain on to the seized cash, not promote. Take provide out of the market, and the demand aspect will get a lift; therefore, costs are stabilized for crypto property which have little to no inherent worth. However that wasn’t sufficient to quell the fury from the crypto neighborhood.
Consequently, the Trump administration is doing one in every of its patented walkbacks. “[Treasury Secretary Scott] Bessent, in an interview, said seized crypto assets would go into the reserve first ‘then we’ll see what the way forward is for more acquisitions for the reserve,’” reported Reuters on Friday.
However don’t fear, as a result of, as Sacks famous in his X submit linked above, “The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.”
So that you see, the reserve gained’t price taxpayers a dime, besides they’re on the lookout for “more acquisitions” that can definitely price taxpayers a dime (and sure way more), however it’s going to all be “budget neutral” and have “no incremental costs” on taxpayers.
I do know bullshit market manipulation after I see it.
Over at Reddit, the crypto subreddit, which continues to be smarting from the Trump and Melania Trump rugpulls (common individuals getting screwed by nugatory meme cash), has been vicious. Posts headlined “In your opinion, is crypto’s primary purpose for this administration to just launder money from foreign entities?” and indignant memes abound.
And there’s one remaining dynamic at play—the unique promise of crypto was a decentralized forex free from the manipulations of nationwide governments. It’s a tech-libertarian utopia thought.
And now you have got bros cheering a authorities—the world’s largest economic system, no much less—actively meddling within the crypto market and making strikes that clearly manipulate costs. The unique “decentralized” fantasy could by no means have been sensible, however this crypto reserve makes an overt mockery of that dream. That has additional divided the crypto neighborhood.
