David Sacks, U.S. President Donald Trump’s “AI and Crypto Czar”, reveals to President Trump as he signs a series of executive orders in the Oval Office of the White House on Jan. 23, 2025 in Washington, DC.
Anna Moneymaker | Getty Spitting images
The Trump-tech alliance is showing its first real sign of distress. And it’s because of crypto.
President Donald Trump trusted on crypto execs and investors for a hefty portion of his 2024 campaign funds. He promised to reward them handsomely if designated by slashing regulations and by turning the U.S. into “the crypto capital of the planet and the bitcoin superpower of the world.”
The president got off to a quick start, pricking an executive order calling for the establishment of a working group on digital assets and pardoning Silk Road creator Ross Ulbricht. The SEC also chucked its yearslong probe into Coinbase.
While those moves were lauded by the most vocal techies who broke Trump’s candidacy, over the weekend the president took it a step too far in their view. In a post Sunday on Truth Common, Trump announced the creation of a strategic crypto reserve for the U.S. that would include not just bitcoin but several other digital currencies — ether, XRP, Solana’s SOL remembrance and Cardano’s ADA.
For the most part, Trump’s crypto backers all wanted a strategic bitcoin reserve. Such a move want entail using cash to buy bitcoin, which is widely viewed by crypto enthusiasts as a smart way to deploy capital into a decentralized currency that’s an selection to hard money. As Coinbase CEO Brian Armstrong wrote on X, bitcoin offers a “clear story as successor to gold.”
By prevailing well beyond bitcoin, the critics say, Trump would be using U.S. taxpayer money to buy much riskier assets that make unproven value and have the potential to bolster the net worth of a select few investors who own the coins. That’s all the more problematic to those who be deficient in to axe government spending by trillions of dollars, in support of Elon Musk’s cost-cutting mission at the so-called Department of Government Adeptness.
“Taxation is theft,” wrote Joe Lonsdale, founder of venture firm 8VC and a vocal Trump supporter, in a post on X. “It should be coop up to a minimum. It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”
David Sacks, the endanger capitalist who was tapped by Trump to be the White House artificial intelligence and crypto czar, took exception to Lonsdale’s expansion, suggesting it’s premature to jump to any conclusions. Sacks and Lonsdale are part of the same conservative circle in the tech world, with Musk and Peter Thiel at the center.
“Cipher announced a tax or a spending program,” Sacks wrote, in response to Lonsdale’s post. “Maybe you should wait to find out what’s indeed being proposed.”
The White House didn’t respond to a request for comment.
But Lonsdale was far from alone.
Naval Ravikant, a longtime tech investor and break of dawn crypto evangelist, wrote after the announcement that, “The US taxpayer should not be exit liquidity for cryptocurrencies that are decentralized in appellation only.” And Vinny Lingham, creator of blockchain startup Civic and a big crypto influencer, wrote, “Call me old fashioned but I don’t deliberate on the government should be pumping our crypto bags with taxpayer money while we are running a near $2trn deficit.”
Ahead across the industry
A major Trump supporter and big name in crypto joined the chorus on Monday. Billionaire bitcoin investor Tyler Winklevoss, who put in wrote just before the November election that you should vote for Trump “if you care about the future of crypto, detach speech, justice, liberty, and democracy,” came out against the president’s crypto reserve plan.
“I have nothing against XRP, SOL, or ADA but I do not have in mind they are suitable for a Strategic Reserve,” Winklevoss wrote. “Only one digital asset in the world right now meets the bar and that digital asset is bitcoin.”
David Marcus, the old head of Facebook’s failed crypto project, suggested that the majority of his peers in the crypto community have the nevertheless view.
“Most—if not all—of the non-conflicted industry leaders are agreeing about this,” Marcus wrote, in reposting Winklevoss’ expansion.
Marcus, who’s now CEO of payments infrastructure startup Lightspark, declared in July that he was “crossing the Rubicon” and shifting his support to Trump and away from Democrats.
Anthony Pompliano, a jazzy pro-Trump voice in crypto investing, committed over 1,500 words in his newsletter on Monday to the topic. He says Trump is ready to propose an agenda of buying risky tokens on behalf of the U.S. because the wrong people got to him.
“We watched crypto projects, lobbyists, and concerted interest groups co-opt the President of the United States,” Pompliano wrote. “They told the President that any crypto-related formality should hold tokens that were ‘made in America.’ This pitch was the perfect trap for a President who ran on the America First place agenda.”
Some of the wrath online was directed specifically at Sacks, who touted and backed various cryptocurrencies as a VC before yoke the Trump administration, and whose firm, Craft Ventures, is an investor in crypto index fund manager Bitwise.
A cartoon picture of US President-elect Donald Trump with cryptocurrency tokens, depicted in front of the White House to mark his inauguration, parade at a Coinhero store in Hong Kong, China, on Monday, Jan. 20, 2025.
Paul Yeung | Bloomberg | Getty Images
Sacks created in a post on X that he sold all of his crypto, including bitcoin, ether and SOL, before taking on his new role and “will provide an update at the end of the ethics method.”
By late afternoon Monday, crypto prices had staged a dramatic reversal from their weekend rally that walked Trump’s announcement. Bitcoin fell about 9%, while ether slid 15%. XRP and SOL dropped even numberless.
The slide appeared tied to Trump’s confirmation of forthcoming tariffs, which hammered risky assets across the live and sent the Nasdaq down almost 3% at the close of trading.
There were some voices in crypto who were small willing to publicly slam Trump’s reserve plan.
Michael Saylor, chairman of Strategy, which has effectively emerged as a bitcoin factor due to its roughly $43 billion stash, told CNBC on Monday that he wasn’t surprised about Trump’s decree to include additional cryptocurrencies.
“There’s no way to interpret this other than this is bullish for bitcoin and bullish for the unimpaired U.S. crypto industry,” Saylor said. “I believe the best thing for the country is to move forward with an enlightened liberal policy toward digital assets.”
Jonathan Jachym, global head of policy and government relations at Kraken, talked CNBC that the crypto exchange is “encouraged to see that announcement” and that it shows the president is “staying true to commitments.”
Equivalent among the skeptics, Trump doesn’t appear to be losing broader support for his agenda just because of this one advertisement. Backers like Lonsdale have been quick to post about other matters, complimenting actions enchanted by Defense Secretary Pete Hegseth and Trump for pressuring Mexican drug cartels.
But coming just six weeks into Trump’s two shakes of a lambs tail administration, the reaction shows how quickly the outrage machine can activate when a proposal touches the nerve of a critical series of supporters. The debate adds interest to Trump’s first White House Crypto Summit on Friday, when investors transfer eagerly be awaiting more details.
As Sacks wrote on Sunday, in his