Trump’s Crypto Strategic Reserve Sparks Conflict Of Interest For Crypto Czar
President Donald Trump has unveiled a plan for a “Crypto Strategic Reserve,” signing an executive order which directs the Presidential Working Group on Digital Assets to explore Bitcoin, Ethereum, Solana, Ripple’s XRP, and Cardano as part of a broader government crypto reserve.
“A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration,” Trump wrote on social media. “I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!”
Almost immediately, accusations of insider dealing and potential conflicts of interest began to circulate. Several commentators pointed out that the five cryptocurrencies in the proposed reserve align conspicuously with the top five holdings of Bitwise Asset Management’s Bitwise 10 Crypto Index Fund.
Hunter Horsley, CEO of Bitwise, noted on his account that the fund’s leading allocations are indeed BTC, ETH, SOL, XRP, and ADA.
Critics have particularly taken aim at David Sacks, Trump’s so-called “Crypto Czar,” who, via his venture capital firm Craft Ventures, invested in Bitwise Asset Management as early as 2017. Pointing to the rapid rise in value across the selected cryptocurrencies, some observers have framed it as “jaw-dropping corruption” that favors a handful of well-connected investors.
Sacks, for his part, has celebrated the inclusion of these tokens. “President Trump has announced a Crypto Strategic Reserve consisting of Bitcoin and other top cryptocurrencies,” he wrote. “This is consistent with his week-one E.O. 14178. President Trump is keeping his promise to make the U.S. the ‘Crypto Capital of the World.’”
Recently, Sacks said that he has divested “all [his] cryptocurrency (including BTC, ETH, and SOL) prior to the start of the administration.” While Sacks’ venture capital firm, Craft Ventures, continues to invest in crypto startups, both he and the firm have exited their direct crypto holdings since Trump’s inauguration.
The timing of certain trading activities has raised even more eyebrows. The Kobeissi Letter, a financial newsletter, pointed out that a mysterious investor took a large leveraged position in Bitcoin and Ethereum just a day before the official announcement.
“Someone took $200,000,000 worth of Ethereum and Bitcoin longs on 50x leverage,” they wrote, noting that even a minor 2% drop in Bitcoin’s price would have otherwise triggered massive losses. The sudden surge in value for BTC and ETH that followed the White House statement appeared to reward that gamble handsomely.
“Did someone know?” the newsletter asked rhetorically.
There are also doubts regarding a broader rationale—particularly why a technology project like Cardano, which some commentators call experimental, would be included under the label of a “strategic asset.”
Information for this briefing was found via Crypto Briefing and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
