Dem
47
GOP
53
Yesterday, Donald Trump followed through on something he has been promising for months, and signed an executive order creating a strategic bitcoin reserve. He's hosting a bitcoin summit at the White House today, and is expected to make a formal announcement then.
In a vein somewhat similar to what's happening with the tariffs, nobody is particularly happy with Trump's announcement. A great many voters don't understand cryptocurrency, or why the U.S. government should be in the business of acquiring crypto. They also cannot help but notice that Trump was anti-crypto, right up until he got into the crypto coin business himself, and then became very interested in using government power to prop up the crypto market.
Meanwhile, economists, who presumably understand these sorts of macroeconomic questions better than the average Joe, aren't happy either. Their problem is that while they understand crypto, and while they understand the purpose of the federal government maintaining a reserve of certain kinds of assets, they really don't understand what is going to be accomplished by the federal government maintaining a reserve of crypto. For example, Stephen Cecchetti, who is an economist at Brandeis University, said the plan was "absurd" and that "it's foolish to purchase risky assets with leverage in the hope of making it easier to repay your debt."
And then there are the crypto enthusiasts, who are ALSO not happy. Because Trump is operating through XO, he's not able to create an actual strategic reserve, supported by substantive government investment. Instead, all he's actually doing is instructing the Department of Justice to put any crypto that it seizes into a federal government account, as opposed to liquidating it. The crypto crowd, at least some portion of it, was imagining a massive commitment to cryptocurrency. The new program is definitely not that.
Other crypto supporters are upset for different reasons. Recalling that the alleged selling point of crypto was that it was not under the control of any government or centralized financial system, some of them are not too happy about the idea of the U.S. government getting into the crypto pond.
Still other crypto lovers observe that whether Trump intends this or not—and either is possible—a "big" claim about crypto reserves followed by a "small" follow-through several days later, creates conditions ripe to be exploited by unscrupulous speculators. For example, in anticipation of Trump's preliminary announcement at the start of the week, a speculator bought $200 million in Bitcoin. The next day, the price of Bitcoin rose, and the speculator sold out, at a profit of about $7 million. Yesterday, after Trump's flaccid XO, the price fell below where it was on Monday. So, that one guy is seven figures richer, while a bunch of other folks are left holding the bag.
In short, we have case study #2329 of "Promises are easy, governing is hard." (Z)