The alliance between US President Donald Trump and the tech world is showing signs of strain, and it’s largely due to cryptocurrency.
Donald Trump relied on cryptocurrency executives and investors for a significant portion of his 2024 campaign funds. In return, he promised to reward them by reducing regulations and making the U.S. “the crypto capital of the world and the bitcoin superpower.”
He quickly took action, signing an executive order to create a working group focused on digital assets and granting a pardon to Ross Ulbricht, the creator of Silk Road. Additionally, the SEC ended its long-running investigation into Coinbase. These steps were met with approval from many of Trump’s tech supporters.
However, over the weekend, Trump’s latest move drew criticism from his crypto backers. On Sunday, he announced the creation of a U.S. strategic crypto reserve, which would not only include bitcoin but also other cryptocurrencies like ether, XRP, Solana’s SOL token, and Cardano’s ADA.
Many of Trump’s crypto supporters had hoped for a reserve focused solely on bitcoin, believing that purchasing the cryptocurrency with U.S. funds would be a wise way to invest in a decentralized alternative to traditional money. As Coinbase CEO Brian Armstrong tweeted, bitcoin is seen as a “clear successor to gold.”
Critics argue that by including other, more speculative digital currencies, Trump could be using taxpayer money to invest in high-risk assets with uncertain value, potentially benefiting a small group of wealthy crypto holders. This concern is particularly troubling for those advocating for drastic cuts to government spending, such as Elon Musk’s proposed reforms at the “Department of Government Efficiency.”
Joe Lonsdale, a venture capitalist and vocal Trump supporter, expressed his disapproval, tweeting, “Taxation is theft. 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.”
David Sacks, another venture capitalist and a key figure in Trump’s tech advisory circle, disagreed with Lonsdale. He suggested it was too early to judge, pointing out that no tax or spending program had been proposed yet. “Maybe you should wait to find out what’s actually being proposed,” Sacks wrote in response.
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