Author: Nic Carter, Partner at Castle Island Ventures & Co-Founder of Coinmetrics; Compiler: Jinse Finance xiaozou
Trump's five cryptocurrency reserve plans would dilute Bitcoin's value proposition and are self-serving - NicCarter
One might think that almost all Bitcoin enthusiasts would be excited about the idea of the US government including BTC (and perhaps other crypto assets) in its cryptocurrency reserves and essentially recognizing it as a global asset of considerable importance. However, I am in the minority who are not optimistic that this policy is good for Bitcoin or the United States itself. Here are eight reasons why I oppose this policy.
1. Things that are easy to achieve are also easy to fail
If Bitcoin enthusiasts want the reserves to last, they should hope that Trump seeks congressional authorization to make the purchase (which is customary for any large expenditure). If it is done only by executive order, the next administration will not feel the policy constraints and can easily revoke it (and destroy the market in the process). If Bitcoin enthusiasts sincerely believe that it is good for the United States to include Bitcoin in the reserves and hold it for the long term, then they should insist on passing laws authorizing reserve spending rather than allowing Trump to implement policies unilaterally.
Many Bitcoin enthusiasts want Trump to make policies without congressional approval, which shows that they are pursuing short-term price increases rather than truly caring about the long-term value of the reserves to the United States. Future Democrats will not hesitate to withdraw reserves immediately.
2. The issuer of the global reserve currency should not panic
The United States is the issuer of the global reserve currency. We do not know yet how the cryptocurrency reserves will be positioned - whether it is just an investment fund or a new commodity currency system that is more intrinsically related to the US dollar like the old gold standard.
If the cryptocurrency reserves are seen as providing new support for the US dollar, I believe this will cause significant uneasiness in the US dollar and Treasury markets. This is equivalent to the US government sending a signal that it no longer has confidence in the existing US dollar system and needs fundamental changes. I think this will lead to a further increase in high interest rates as the market begins to doubt whether the United States is considering a debt default. Instead of playing with the structure of the entire dollar system, the U.S. government should solidify investors’ confidence in its ability to sustain its debt by pursuing policies that promote growth and reduce deficits.
Many Bitcoin enthusiasts do not accept this reasoning and only want to accelerate the collapse of the dollar. I think this is a form of financial terrorism. I do not believe in financial accelerationism, nor do I think Bitcoin or any other crypto asset is ready to be backed by the new dollar commodity standard.
3. The United States already holds a lot of Bitcoin
American funds and individuals hold more Bitcoin than citizens of any other country on Earth - almost certainly by a large margin. The United States has benefited from this state of affairs. When Bitcoin rises, those Americans who realize the gains pay taxes to the government - 20% or 40% of the gains, depending on how long they hold it.
This is an important point that should not be overlooked. The United States has benefited from the rise of Bitcoin through tax realization - more than any other country. Given this, do we really need to pick a big fight and insist that the U.S. government also directly hold these assets? No one is pushing the United States to buy Apple or Nvidia shares. Why Bitcoin?
4. Cryptocurrency reserves have no “strategic” value
Typically, assets and commodities acquired at the U.S. government level are things that might be needed in an emergency and must be accumulated in advance. Oil reserves are a good example, as oil is obviously an essential commodity and in a crisis we may not be able to get all the oil we need.
We also maintain other types of strategic asset reserves, such as medical supplies and equipment, rare earth minerals, helium, metals such as uranium and tungsten, and agricultural products. These all have a clear purpose: to create a reserve that can be used in an emergency.
We also store foreign exchange in case we need to intervene in currency markets, although these interventions are becoming increasingly rare. There is no obvious strategic use for Bitcoin (certainly not Cardano or Ripple). The average American does not need a “supply” of Bitcoin or any other crypto asset to maintain their quality of life. If the entire financial system ran on a blockchain and we needed tokens as fuel (the only similar “industrial” use I can think of), that might change, but that is not the current situation. The only “strategic” use of Bitcoin is just to “go long” the asset at the national level and sell it later, but you can achieve this with any other financial asset. There is nothing unique about Bitcoin (or any other crypto asset) in this regard.
Of course, if you were to eventually back the dollar with Bitcoin in some kind of new gold standard, then it would have strategic use (in which case you should refer to point 2). But I don’t think that’s the current intent.
5. Crypto reserves dilute Bitcoin’s value proposition
Mixed together with competing crypto assets like Ethereum, Cardano, Solana, and XRP, and given them equal recognition, devalues Bitcoin by making it look indistinguishable from those assets. Bitcoin is the only one of them with a trusted supply schedule and true decentralization at the protocol level. Crypto reserves create confusion and devalue Bitcoin in the eyes of the public. Principled Bitcoiners should push for an all-or-nothing approach; either all Bitcoin or no reserves.
6. Bitcoin doesn’t need a government
I wonder what the early libertarian Bitcoiners of 2012-2016 would think of Bitcoiners of 2025 pushing for a government to back the value of their coin. Aside from the confusing ideological evolution the Bitcoin community has undergone, there is one more thing to note. Bitcoin has been one of the best performing investments in history, going from a tiny value in 2009/10 to a multi-trillion dollar total value in 2025. It has done all this without government backing and, in many cases, with open hostility from several powerful countries. Cryptocurrency reserves will transform Bitcoin from an apolitical asset to a government plaything, subject to the political cycle in Washington. Bitcoin enthusiasts have never been people who are beholden to the government, and they should not be now.
7. This will make Americans hostile to Bitcoin enthusiasts
Only a small fraction (roughly 5-20%) of Americans own Bitcoin, and even fewer own other crypto assets. Many Bitcoin enthusiasts have become very wealthy as a result of their historical investment in the coin. Using taxpayer money - no matter how it is allocated - to prop up the price of Bitcoin and other crypto assets is politically unpopular at a time when spending is under intense scrutiny. Biden's proposed student loan forgiveness plan has met with huge resistance, even though it could apply to 43 million borrowers. Bitcoin enthusiasts are a much smaller group and have even less need for government financial support. This policy will undoubtedly create unnecessary hostility towards the crypto community in the wider society.
8. Cryptocurrency reserves appear to be self-interested
It is no secret that Trump and his cabinet and inner circle hold a variety of crypto assets. Trump himself has launched or participated in: an NFT project based on ETH, multiple memecoins based on Solana, and of course World Liberty Financial, which holds a range of crypto assets. We need Trump to develop reasonable crypto policies, and based on his appointments to the Treasury Department, Commerce Department, SEC, CFTC, OCC, etc., he seems to be achieving this.
However, using resources to directly drive up the value of tokens held by Trump (and many in his inner circle) is unpleasant. Most of us in the crypto industry are just asking for reasonable policies and fair rules so that we can do business in the United States. Trump's proposal goes far beyond that and uses taxpayer money to speculate on the tokens themselves, potentially enriching himself and those in his camp.
To Trump's critics, this is a move that shows corruption. This also makes Trump's other efforts to support crypto policymaking and regulation look self-serving and not conducive to good policy standing alone. The next US administration may choose to negate it all and reverse all the progress the US has made in the crypto space. Cryptocurrency reserves offer moral validation for the future era of crypto degradation.
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