The cryptocurrency industry got what it deserved.
I know I've been saying this frequently lately, but this is truly absurd.
The cryptocurrency market operates continuously, which made the recent statement by former President Donald Trump on a Sunday quite fitting. He announced his intention to reward millionaires who supported his presidential campaign, stating that the creation of a Cryptocurrency Reserve in the U.S. would elevate this critical industry after years of attacks from the Biden administration. In a post on Truth Social, the platform he owns, his son Eric suggested that this announcement could be seen as market manipulation.
During his campaign, Trump had promised cryptocurrency supporters a “strategic national reserve of bitcoin,” but the new post expands the plan to include other cryptocurrencies such as Ethereum, Solana, Ripple (XRP), and Cardano. However, clarity on who will acquire and hold these tokens, or even whether they will need to be purchased, remains uncertain.
The proposal to establish a cryptocurrency reserve seems questionable, given that the U.S. dollar is the global reserve currency, used for international transactions and considered a safe asset. The demand for U.S. Treasury bonds allows the U.S. to borrow money more easily compared to other countries. The sanctions imposed by the U.S. government have a strong impact due to the dollar's influence, granting soft power to the country.
The announcement of a cryptocurrency reserve could benefit Trump's donors in the crypto industry without the country being able to exercise control over those assets, which are often associated with crime and whose valuation is highly unstable. While other reserves, such as oil or vaccines, have practical uses, cryptocurrencies are more associated with investor speculation.
Some economists have argued that a crypto reserve could extend the influence of the dollar. However, this view is debatable, considering that the most significant reserves of Bitcoin are held by an anonymous entity, which could destabilize its price if the U.S. government decided to intervene. How this reserve would be utilized remains unclear, and its implementation could harm the dollar by increasing import costs and affecting citizens' savings.
Incorporating additional cryptocurrencies into the proposal further highlights support for assets controlled by venture capitalists, contradicting the ideals of bitcoin as a decentralized option. The influence of these investors in politics is also notable, as they have invested considerable sums in elections, which has led to the reduction of certain regulations by the Securities and Exchange Commission.
The pursuit of government bailouts by the crypto industry indicates a bleak outlook for its future. Initially promoted as solutions to monetary problems, cryptocurrencies have failed to become a practical alternative for everyday transactions, and following recent scandals, their popularity among the public has decreased significantly.
An additional concern is that the creation of a cryptocurrency reserve could also benefit criminals and totalitarian regimes, as these assets are widely used in illegal activities. Market manipulation for political purposes could result in the proposal never materializing, and ultimately the only beneficiaries may be some investors and hackers, while the negative impact would fall on American taxpayers.
