Is Trump really all in on crypto, or is this another opulent boon for his billionaire cronies? Let's be real, folks. The rapid pivot to digital currencies makes our collective hearts sink. Shortsightedly, the notion of a “Crypto Strategic Reserve” stocked with speculative altcoins is nothing more than a Trojan Horse that protects the connected and powerful while exposing millions of everyday Americans to financial disaster.

Crypto Reserve = Risky Business?

Even the idea of a “Crypto Strategic Reserve” funded with assets such as Solana and Cardano is an enormous red flag. These are not predictable, safe, secure stores of value like gold. They’re speculative assets subject to violent ups and downs on the back of hype and rumor. Now picture your government using your tax dollars to gamble on meme coins!

And who decides which cryptos are in this reserve? Who manages it? The lack of transparency is deafening. This creates a space for egregious market manipulation and insider trading. Only those with privileged connections are able to harvest lavish windfalls, while everyday investors who get suckered in lose their shirts when the bubble bursts—as it always does. Remember the Gamestock fiasco? This would be Gamestock on steroids, with taxpayers’ dollars at stake. It’s the equivalent of giving a pyromaniac a box of matches and a seat next to a gas station.

Forgotten Voices, Louder Risks

We should not forget the serious harm this policy would do to marginalized communities and low-income people. These are the same folks who can least afford to be wiped out from high risk, speculative crypto investments. They’re the most vulnerable to fraud and predatory schemes that promise overnight wealth.

Imagine a single mother, struggling to make ends meet, who invests her entire savings in a hyped-up altcoin based on Trump's endorsement, only to see its value plummet overnight. To be clear, this isn’t some far-off hypothetical situation. What support system will they have to fall back on? Where is the consumer protection? Will there even be consumer protection?

This isn't about embracing the future of finance. It's about exploiting the vulnerable for the benefit of the powerful. It's a wealth transfer disguised as innovation.

Unintended Consequences Abound

Trump’s sudden embrace of cryptocurrency has created some short-term dangers for everyday investors. It might result in serious unintended consequences for the financial system as a whole. A government-backed crypto reserve could create regulatory arbitrage, encouraging companies to flock to jurisdictions with lax rules, further destabilizing the global economy. It might also undermine confidence in the financial system writ large, triggering a capital flight and greater instability.

Furthermore, consider the message it sends. With this embrace of volatile altcoins, the government is not only encouraging speculative behavior, but subverting the value of sound financial planning. It’s the equivalent of asking Americans to roll their life savings on a roulette wheel.

The risk to this approach I’d say is that it backfires spectacularly. What do you think will happen when the crypto market inevitably crashes? Will taxpayers have to pay for government to add a footnote and bail out the reserve, thereby tapping already stretched public resources? Or will they allow it to go under, forcing taxpayers to absorb the shortfall?

  • Potential Problems
    • Market Manipulation
    • Insider Trading
    • Lack of Transparency

A Progressive Path Forward

There's a better way forward. We deserve robust consumer protections that can protect everyday Americans from crypto scams and market instability. We must enforce tougher regulations on crypto exchanges to stop their use in money laundering and other illegal activities. We certainly should be doing more financial literacy education to help people feel confident making investment decisions.

Senator Lummis’ Bitcoin-as-a-reserve-bill provides a useful starting point. It takes some deep review and deliberate revisions to ensure equitable and accountable processes. Focusing solely on Bitcoin, as Brian Armstrong suggests, might mitigate some risks, but we still need robust regulations to prevent market manipulation and protect consumers.

This is the opposite of stifling innovation. It’s about ensuring that Americans can genuinely benefit from the promise of crypto while responsibly mitigating the risks. After all, it’s not just a financial system that favors the 1%, it’s starting to look like a crisis.

Demand Accountability Now!

Don’t let Trump’s crypto pivot turn into the new shiny object for enriching the connected class at the expense of everyone else. Demand transparency and accountability from policymakers. Encourage them to put consumer protection and our long-term financial stability ahead of short-term political advantage. Oppose legislation that increases wealth inequality and puts at-risk communities in further financial peril.

The White House Crypto Summit on March 7th is a once-in-a-lifetime opportunity to help craft the future of crypto regulation. Let’s ensure that the voices of everyday people are included, and I do mean included. So let’s call for an economy that serves the many and not just the same elite 1%.

It's time to dismantle the Trojan Horse, brick by brick.