A summit on cryptocurrency will be held at the White House Friday, and more details are expected to come out about President Donald Trump’s plans for a “U.S. Crypto Reserve.”
At this point, it is not exactly clear what this reserve would look like, how it would be funded or what its exact purpose would be. Here’s what we know so far.
In a January 23 executive order, the president said that his administration planned to support the digital asset industry and said that it “plays a crucial role in innovation and economic development in the United States, as well as our Nation’s international leadership.”
That order called for the establishment of a “Working Group on Digital Asset Markets” that was tasked with evaluating the potential creation and maintenance of a national digital asset stockpile. It added that this stockpile would potentially derive from cryptocurrencies lawfully seized by the federal government through its law enforcement efforts.
Trump revealed more about the plans this week on Truth Social. He said that a “U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration,” and added that it will include XRP (Ripple Labs token), SOL, and ADA, with Bitcoin and Ether at “the heart” of the reserve.
James Butterfill, head of research at asset manager CoinShares, said he was surprised to see crypto other than bitcoin included in the reserve, according to Reuters. He said it “suggests a more patriotic stance toward the broader crypto technology space, with little regard for the fundamental qualities of these assets.”
Following Trump’s posts on Sunday, TIME reported that: “It is unclear whether taxpayers will fund the reserve, how big it will be, or whether it will be used to pay off the U.S. federal debt, as some have suggested.” However, Trump’s Crypto Czar, David Sacks, said in a Monday X post that “nobody announced a tax or a spending program.”
TIME also noted that Trump’s announcement drew criticism from economists and even some crypto enthusiasts. Stephen Cecchetti, an economist and professor at Brandeis International Business School cited by the outlet, called the idea of a cryptocurrency reserve “absurd.”
Both TIME and The Atlantic noted that the U.S. has a history of stockpiling things. The Atlantic said that the phrase “strategic crypto reserve,” that Trump used on Truth Social is “of course intended to draw a parallel” to the Strategic Petroleum Reserve maintained by the Department of Energy as a safety net for disruptions to oil supply.
There is also a stockpile of gold from when the U.S. held to The Gold Standard (that ended in the 1970s). Though The Atlantic said that the U.S. gold holdings at Fort Knox are “essentially pointless,” Trump is also interested in them and has ordered his ally and Department of Government Efficiency (DOGE) leader, multibillionaire entrepreneur Elon Musk, to inspect them.
Both the gold and oil reserves and other reserves like medical equipment and helium are kept in an effort to keep things stable. As for the proposed crypto reserve, TIME said it seems “fundamentally different in nature, because it hinges not upon the asset’s importance to the nation, but the idea that its prices will increase going forward,” and that crypto enthusiasts want the reserve to help prices skyrocket rather than keep them stable.
“Federal purchases of crypto would send a signal that crypto is here to stay, encouraging other respected financial institutions to buy in,” it said. “Other governments, too, might follow the lead and create their own reserves, further upping prices.”
Federico Brokate, head of U.S. business at 21Shares, a digital assets investment management firm, also said that Trump’s move has the “potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the U.S.’ leadership in digital asset innovation,” as cited by Reuters. Trump has said that he wants the U.S. to be a leader in the crypto sphere.
“I will make sure the U.S. is the Crypto Capital of the World,” he said in his Truth Social posts “We are MAKING AMERICA GREAT AGAIN!”
In a Thursday X post, Sacks argued that: “Over the past decade, the federal government sold approximately 195,000 bitcoin for proceeds of $366 million. If the government had held the bitcoin, it would be worth over $17 billion today. That’s how much it has cost American taxpayers not to have a long-term strategy.”
While Sacks appealed to potential benefits of investing in cryptocurrency, Cecchetti argued that “it’s foolish to purchase risky assets with leverage in the hope of making it easier to repay your debt.”
According to TIME, U.S. law enforcement already holds about 200,000 Bitcoin that is worth around $17 billion. This Bitcoin has mostly been obtained through criminal seizures and is managed by the U.S. Marshals Service. Typically, it’s been auctioned to support law enforcement operations and to compensate victims of crypto-related crimes.
“It’s unclear if Trump aims to co-opt those Bitcoins for the reserve, or how the government could go about transferring those funds from Justice to Treasury,” said the outlet.
Even though Trump is friendly to the crypto industry (his family even has their own coins), cryptocurrency prices fell after he took office and kept sliding in recent weeks, The Atlantic said. It also said that caused “discontent” among Trump’s allies in the industry and that his announcement about the reserve seemed to some like an attempt to stop the prices from going lower.
Reuters reported that Bitcoin and Ether were both up Monday and that the total cryptocurrency market had risen about 10%, or more than $300 billion, in the hours since the president’s announcement. The Atlantic noted Tuesday that “many of those gains were given back,” due in part to uncertainty about what the Crypto Strategic Reserve might look like.
For Americans who don’t hold crypto, there are also concerns: “Filling a crypto reserve would effectively represent a huge transfer of wealth from taxpayers to crypto HODLers (a nickname derived from a common online typo of hold, also said to stand for “hold on for dear life”),” The Atlantic claimed.
Eleanor Terrett of Fox News said Tuesday that the White House crypto summit is expected to include 20 to 25 people. She said a “larger, invite-only reception is being planned across the street from the White House after for those not invited to the roundtable meeting.”
Bloomberg reported Thursday that “Trump’s decentralized-finance project World Liberty Financial appears to have bought more than $20 million worth of cryptocurrencies including Ether two days before,” the summit.