U.S. President Donald Trump has signed an executive order establishing a strategic reserve in cryptocurrencies. The new initiative, named the Strategic Bitcoin Reserve and Digital Asset Stockpile, aims to create a government-held crypto reserve with a primary focus on Bitcoin, which has been dubbed “digital gold” and the core currency of a virtual Fort Knox. Trump’s decision has sparked a wave of criticism, especially from The Atlantic, which called the move a “dangerous taxpayer-funded speculation.”
According to The Atlantic journalist Ben Walsh, the concept of cryptocurrency reserves contradicts the very principles of strategic stockpiling. Unlike oil, cabbage, or pork — resources that may be urgently needed in times of crisis — cryptocurrency is a highly volatile, speculative asset with limited real-world utility.
“Creating a crypto reserve is essentially turning the U.S. government into the last fool who bought a speculative asset at its peak,” Walsh writes.
A Virtual Casino Instead of a Real Fort Knox
At a crypto summit held at the White House, Trump declared: “Don’t sell your Bitcoins. That’s what they say. I don’t know if that’s right or not. Who knows.” According to the President, the new reserve is meant to stimulate economic growth and strengthen America’s technological leadership. However, The Atlantic questions whether crypto can fulfill any of the functions traditionally expected from strategic state reserves.
The publication notes that much of the cryptocurrency in government possession was seized in criminal and civil proceedings. Current estimates place the value of this stockpile at approximately $17 billion in Bitcoin. But critics argue that merely rebranding these assets as a “strategic reserve” doesn’t make them a tool for economic stability.
Interests and Insider Ties
The creation of the crypto reserve also raises concerns about potential conflicts of interest. Donald Trump previously launched his own meme coin, $TRUMP, and several key figures in his administration have close ties to the crypto industry. Among them are venture capitalist David Sacks, who now serves as an advisor on crypto and AI, and Commerce Secretary Howard Lutnick — both of whom previously held substantial crypto assets.
Posting on his social network Truth Social, Trump pledged: “I will do everything to make the U.S. the crypto capital of the world. We will make America great again.”
Driving Up Prices: The Greater Fool Theory at Work
Critics note that the creation of a government-backed crypto reserve could potentially drive up the price of digital assets. The main goal, they argue, is to artificially support prices through state-driven demand. This aligns with the so-called “greater fool theory,” which is based on the idea of buying an overvalued asset in the hope that someone else will pay even more for it.
Trump’s executive order calls for active purchases of Bitcoin and other cryptocurrencies, which in itself could trigger a price increase. However, as The Atlantic emphasizes, such actions lack strategic value and undermine confidence in the financial system.
After the executive order was announced, Bitcoin’s price briefly rose, particularly after Trump mentioned specific cryptocurrencies — Bitcoin, Ethereum, Solana, Cardano, and XRP — in his speech. But the market soon corrected, and Bitcoin’s value fell, which analysts say reflects the inherent limitations of this approach.
Anonymity and Corruption Risks
The very nature of digital assets raises additional concerns. The anonymity of cryptocurrencies allows them to be used in illicit transactions, including bribery and money laundering. While government ownership of crypto doesn’t necessarily imply illegal use, the potential for abuse raises serious questions about transparency and oversight.
“Cryptocurrency requires a constant flow of good news. But the good news is running out,” notes Walsh.
A Pure Speculative Bubble?
According to The Atlantic, the idea of a crypto reserve may be nothing more than a well-packaged form of speculation. Without sustained price growth, the crypto assets in the reserve will become essentially worthless. And if the government continues trying to inflate the value artificially, it risks becoming a gambler betting everything on one unstable asset.
“In the end, America may be left holding a pile of overvalued crypto with no clear plan for how to turn it into something of value for society,” Walsh concludes.