Trump’s "Crypto Reserve" is a world historical grift
Corruption doesn’t get much more blatant than this.
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Authoritarian regimes by definition have no accountability to voters or the public. That means autocrats and their cronies can gorge themselves at the public trough and blatantly steal from taxpayers with few if any consequences.
It's not really a surprise, then, that as part of his authoritarian power grab, Trump has embraced brazen and open self-dealing. The most ludicrous example of this is the scheme he announced last Sunday for a national crypto reserve.
As with many of Trump’s big orange dreams, it’s not exactly clear what the crypto reserve will entail or how it will work. But the brilliance of the half-baked idea is that Trump and his cronies can make bank just by talking about it. The president can use his bully pulpit to manipulate markets. And who’s going to stop him?
Trump, fresh off avoiding 88 felony charges, obviously feels confident that the answer is “no one.”
Government on the blockchain
Crypto refers to digital currencies which are generated and stored in a digital ledger, or blockchain. In theory, cryptocurrencies do not rely on a central government authority. Proponents say they are useful for quick or anonymous transactions. Critics point out that cryptocurrency seems designed for hiding illegal transactions and/or creating what are essentially Ponzi investment schemes.
Because of the downsides, President Biden created moderate guidelines to try to regulate some of the worst excesses of the industry, which made him an enemy of hardcore crypto boosters. But Trump in his first term expressed even deeper skepticism about cryptocurrencies, saying they are based on “thin air.”
During the 2024 election, though, crypto investors spent tens of millions on Republican campaigns. Trump, who never saw a quid pro quo he didn’t love, changed his tune, embracing crypto-friendly policies. After his victory, he followed through by appointing venture capitalist and Elon Musk crony David Sacks as a White House crypto czar.
Another reason Trump flip-flopped on crypto is that his family figured out how to cash in. Following the election, Trump squandered some of the goodwill he had built up with the crypto industry when he and his wife Melania launched memecoins — essentially valueless crypto confidence games — that both surged in value, making the Trumps billions (but undermining the credibility of crypto in the process). That came after his two adult sons, Eric and Don Jr, launched their own crypto company during the campaign called World Liberty Financial. Boosting crypto as president, then, allows Trump and his family to profit directly from his public office.
Trump announced his thank you to the industry last Sunday, when he declared that he would create a “Crypto Strategic Reserve” in order to make the US “the Crypto Capital of the World.” He of course claimed the move is part of “MAKING AMERICA GREAT AGAIN.”
But the actual point of the crypto reserve, much less the details, are sketchy at best. Proponents argue crypto is a store of value, like gold, and could help damp inflation. But the major cryptocurrencies tend to rise and fall in value based on broader macroeconomic sentiment. And since crypto is volatile and, unlike gold, has no intrinsic value, it’s hard to credit its usefulness as a currency stabilizer.
In any case, Trump’s announcement didn’t say anything about using the reserve to hedge against inflation. Instead, he presented the scheme as if the goal of the reserve was just to boost the domestic crypto industry against foreign competitors. It’s a kind of farm subsidy, but for billionaires making digital magic beans instead of food.
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It's also unclear where the money for purchasing all this crypto would come from. You could build a reserve by holding onto crypto assets seized by law enforcement, an idea Trump touted in the past. Alternately, the government could purchase crypto, though that would probably require congressional legislation (and piss off taxpayers).
Maybe Trump plans to use all the DOGE savings from gutting Social Security to buy crypto. Grandma starving in the street is a small price to pay for enriching Republican party donors, after all.
The Trump pump and dump
The real genius of the crypto reserve, though, is that Trump doesn’t need to figure out how it works to enrich his buddies. All he has to do is tip off his friends, then tout certain coins on Truth Social.
You could see this dynamic at work in Trump’s initial post about the reserve. He suggested the reserve would include a range of coins, mentioning several currencies in particular: XRP, Cardano, and Solana. XRP jumped 20 percent in value, Cardano increased a whopping 60 percent, and Solana rose by 12 percent. Then Trump unleashed a second post saying that the largest currencies, Bitcoin and Ethereum, would also be included. They both quickly gained more than 10 percent.
Obviously, if someone had been tipped off about Trump’s posts beforehand, they could have made millions, or even billions. And sure enough, a few hours before Trump announced the reserve, someone purchased $200 million in Ethereum and Bitcoin and made a killing. Was it a White House insider? Was it someone connected to the Trump family? How can we be sure it wasn’t?
It’s not hard to identify some of the people near Trump who might have benefited. Crypto czar David Sacks claims he sold all his direct holdings in the cryptocurrencies Trump mentioned — but he didn’t discuss his indirect holdings through Bitwise, a crypto index fund.
Even more blatantly, last week after Bitcoin had a big drop in price, Trump’s son Eric —who again has started a crypto company — rushed to social media to urge people to “buy the dips!!!”
Maybe Eric Trump is a brilliant investor. But maybe he has inside information.
Even billionaires aren’t buying it
The combination of half-assed plan and clear-cut corruption has been too much for even many crypto moneybag fanboys.
Coinbase CEO Brian Armstrong, who Forbes calls “the richest American in crypto” based on his $9.6 billion net worth, said that any reserve should be composed solely of Bitcoin. Joe Lonsdale, billionaire cofounder of defense contractor Palantir and an enthusiastic Trump supporter, said that it was “wrong to tax me for crypto bro schemes.”
Jason Calacanis, who actually co-hosts a podcast with Sacks, said the reserve was the “Trump Pump” and added that it was an “insane grift.” He also said that “it’s a terrible idea to spend tax payer money buying the crypto bags of the people who donated many millions to him.” Jeff Park, a strategist at Bitwise, where Sacks is an investor, said it was a “huge political miscalculation” to include coins other than Bitcoin.
It's possible that guys like Armstrong and Calacanis are principled critics of a corrupt scheme. Or maybe they’re upset because they want the corrupt scheme to provide them personally with more benefits. Or maybe they’re upset because they hoped the grift would be less blatant.
In any case, it seems significant that even cryptobro Trump insiders are unable and unwilling to make the case for the chaotic rollout of an incoherent policy which seems to have no purpose other than enriching those in the know and propping up an industry that handed Trump millions in the last election.
Grifter in chief
On the scale of current horrors, a few billion in straightforward graft seems relatively benign compared to Republican plans to gut Social Security and Medicaid. Or to the black box concentration camps Trump set up in Guantanamo. Or to Trump’s despicable betrayal of Ukraine.
The ugly bit about the reserve, though, is less the corruption itself than the bland sense of impunity behind it.
Trump has never been shy about grifting. He set up a fake real estate university to grift students in the 2000s. More recently, he’s used his MAGA cult leader status to sell true believers everything from NFTs to Bibles to shoes.
Even by those standards, though, the “Crypto Reserve” seems like a gratuitous grotesque swindle, as Trump uses his power to manipulate markets and hand out huge paydays to whoever happens to be in the room while he’s composing his Truth Social declarations.
The boondoggle is so obvious, and so clumsy, it barely even feels like a scam. Instead, it functions more as an open declaration of Trump’s contempt for the public, his office, and for the rule of law. If you’ve ever wondered what it’s like to live in an authoritarian kleptocracy, this is it.
That’s it for today
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Thanks for reading.
Loved your article. It inspired this interactive follow-the-money infographic.
Crypto Kings Win, You Lose: How Trump cuts your Medicare & Social Security to pay back his donors. Follow the money!
https://thedemlabs.org/2025/03/07/trump-crypto-reserve-grifting-corruption-cuts-medicare-social-security/
Musk’s demotion is to have the Federal cabinet leader liable for future Federal employee firings. Musk has thousands of civil lawsuits coming his way for fired-employee damages. There is a fraud by Trump and Musk. Americans are being played. Illegal actions are not savings, they’re crap. We are being distracted by hundreds of line item veto “ex post facto” savings, all of which are illegal. We are being distracted by Federal employee firings, all of which are illegal. We are being distracted by thousands of cancellations of grants and contracts, all of which are illegal. The courts are intervening now.
The Fraud on America: Trump, Musk, and Speaker Johnson are trying to ram through the tax cuts, before:
• the courts cite them with civil contempt and levy huge financial penalties
• the impact of their illegal actions are reversed, and their “savings” flip back to $0.00.
I call for immediate full disclosures of what currently is in douchebag Musk’s DOGE bag of findings. He is hiding that at the moment since the courts have stifled his efforts. Let us make him certify his cost and pricing data, so that it comes under the Truth in Negotiations Act, now the Truthful Cost or Pricing Data Act (Title 41 U.S.C., Chapter 35). That must be required. I also call for Musk’s testimony under oath before Congress.
I call for Musk to divulge the truth of what he found, after he deletes what the courts say he cannot do. He cannot fire. He cannot cancel a single contract or grant. He cannot impound funds. Johnson intends to use Musk’s currently bogus data in his CR bid. Crook.
Spare me the BS braggadocio about saving billions and billions. Illegal actions are not savings, they’re crap. I don’t buy crap when we are talking about a $4.5 trillion tax cut. I say Trump and Musk’s ploy is all a fraud founded on a bag of smoke and mirrors, now a hidden accounting not corrected by current court edicts, and a “bury you in paper” con job.
Let us see it. Empty the douchebag’s DOGE bag. Transparency now! Don’t let the douchebag hide it another day. We cannot shoot any line item down until the residual data is displayed.
https://hotbuttons.substack.com/p/empty-doges-bag?r=3m1bs