Will Donald Trump risk MAGA taxpayer funds to keep BTC afloat?
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Donald Trump is taking credit for the price surge of BTC and other tokens, but is he willing to risk MAGA taxpayers’ funds to ensure these surges aren’t transitory?
On December 10, Trump’s son, Eric, took to the stage at the BTC conference in Abu Dhabi to promote both the BTC token and his family’s decentralized finance (DeFi) project, World Liberty Financial (WLF).
Eric’s speech celebrated the BTC token’s fiat value recently passing the $100,000 mark, and while BTC has since slumped back to the mid-90s range, Eric predicted that the token’s fiat value would one day surpass $1 million per coin.
On December 5, Donald Trump posted a message on his Truth Social platform that appeared to take credit for BTC topping $100,000, saying, “CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!!” On December 10, Axios quoted a ‘top transition source’ saying Trump wants to see BTC hit $150,000 per token early in his second term in office.
The same source called BTC “another stock market for [Trump],” suggesting Trump will devote the same level of attention to ‘crypto’ prices that he historically applied to more mainstream business metrics like stock market indices. Trump routinely takes credit for gains in the Dow Jones or S&P500 numbers, even when he was out of office while blaming others for stock market downturns.
It’s not like Trump hasn’t already set the table for the most favorable regulatory environment ‘crypto’ has ever known stateside. While Trump’s second term doesn’t officially begin until January 20, Eric told CNBC this week that his father had already “cleared out” people like Gary Gensler, current chair of the Securities and Exchange Commission (SEC), who plans to step down the day Trump is inaugurated.
Trump recently named Paul Atkins as Gensler’s replacement, signaling a far less combative approach to digital assets under Trump’s SEC. But that hasn’t been enough to satisfy some prominent crypto bros, who are seeking a full purge of any remaining Gensler allies, including SEC commissioner Caroline Crenshaw, whose renomination will be considered by the Senate Banking Committee on Wednesday, December 11.
On December 6, the Committee’s ranking member Tim Scott (R-SC) issued a statement saying this “11th hour push by Democrats to ram through President Biden’s nominees is a blatant attempt to hinder President Trump’s agenda.”
Prominent crypto bros, including Brian Armstrong and Paul Grewal, respectively the CEO and chief legal officer of the Coinbase (NASDAQ: COIN) exchange, are calling for Crenshaw’s head. Armstrong called Crenshaw “a failure” and warned Committee members that “the crypto community is watching this vote.” Grewal added his own threat, saying “any Senator voting to reappoint her should bear in mind what crypto voters had to say in November and will say again in 2026.”
Both execs are referencing the outsized influence that ‘crypto’ political action committees like Fairshake had in the 2024 election cycle. Fairshake and its related PACs have already amassed over $100 million in dry powder for the 2026 midterm elections, and both execs appear keen to remind Washington of the power they allegedly hold over electoral outcomes.
A group calling itself the CEDAR Innovation Foundation has mounted “a targeted digital ad campaign” to ensure Crenshaw isn’t renominated. Both CEDAR and Fairshake share a spokesperson (Josh Vlasto) who insists there’s “no connection at all” between the two advocacy groups.
The Democrats still control the Senate during this lame duck session, and outgoing Banking Committee chair Sen. Sherrod Brown (D-OH) was the biggest scalp claimed by Fairshake et al. this year, so don’t expect much help from him in fulfilling Coinbase’s wants/desires.
CFTC yourself in the role
Trump is still mulling who will take over from Rostin Behnam as chair of the Commodity Futures Trading Commission (CFTC), which may prove far more important to ‘crypto’s’ future than the SEC.
Existing legislative proposals suggest the CFTC would take point on regulating digital assets in Trump’s second term, relegating the SEC to a secondary role. Former CFTC chair Chris Giancarlo recently claimed that the CFTC “could hit the ground running to begin regulating digital commodities on day one” of Trump’s second term.
Fox Business reported that Trump’s shortlist for CFTC chair includes Perianne Boring, founder/CEO of The Digital Chamber (TDC) trade group (which also opposes Crenshaw’s renomination.) Boring is a former TV anchor, which could prove the ultimate selling point for the visually-focused president-elect.
Other candidates include Jill Sommers, a former CFTC commissioner currently working in the derivatives sector, as well as current commissioners Caroline Pham and Summer Mersinger. Pham is a crypto fan who once posed for a photo with (not yet) disgraced FTX boss Sam Bankman-Fried and later claimed FTX’s downfall was the fault of U.S. regulators.
Interestingly, Pham’s view is shared by the incoming Atkins, who last year blamed FTX’s collapse on the SEC’s failure to “make our rules accommodating to this new technology.” While Atkins acknowledged the $8 billion fraud that SBF perpetrated before FTX failed, he claimed that other exchanges such as Binance “cannot comply with the regulations as written [by the SEC] and still operate with these decentralized distributed ledger type of assets.”
BTC reserve: bullish or bullshit?
While Trump is definitely making good on his campaign pledge to become America’s first ‘crypto president,’ we’re waiting to see whether he’s willing to put the power of America’s purse behind BTC—and whether the American taxpayer is willing to follow him down this dead-end street.
We’re talking about Trump’s July pledge to establish a “strategic national [BTC] stockpile,” made up of the roughly 210,000 tokens that U.S. federal authorities have seized over the years, along with other tokens the government might ‘acquire’ going forward.
The question is: will these tokens be ‘acquired’ by additional seizures—which seems less likely given the incoming administration’s more laissez-faire approach to all things blockchain—or will they be bought with federal tax dollars, as so many blockchain enthusiasts are begging the government to do?
Sen. Cynthia Lummis (R-WY) has introduced legislation that would empower the feds to sell its gold certificates and use the proceeds to buy one million of the 21 million BTC tokens that will ever exist. MicroStrategy’s (NASDAQ: MSTR) boss Michael Saylor, who has acquired ~2% of BTC’s total supply and continues to buy more, recently suggested the feds sell all its gold and buy over five million BTC.
Other companies that have been aping Saylor’s ‘BTC reserve’ corporate strategy, like block reward miner MARA (NASDAQ: MARA), are publicly applying pressure on Trump to make good on his pledge by acquiring more BTC.
Much of this pressure is based on the fact that BTC’s post-election surge has coincided with the unfettered BTC shopping sprees of Saylor, MARA and others. But there are signs that this artificial inflation has its limits.
On December 9, MicroStrategy announced it had bought another $2.1 billion worth of BTC, bringing the company’s total expenditure to date to $25.6 billion. And yet December 9 saw BTC’s fiat price drop from nearly $100,000 to below $95,000 before closing the day up a tick. On December 10, MARA announced its acquisition of another $1.1 billion worth of BTC, but BTC’s value again dipped as low as $94,000 before recovering slightly.
If these 10-figure buys aren’t capable of moving the needle in a sustained upward direction, then the only hope is a government that (for the time being, at least) prints the world’s reserve currency and can borrow at a scale the Saylors of the world can only dream of.
A bad deal for Americans
Not everyone is a fan of Uncle Sam serving as exit liquidity for BTC whales. Former U.S. Treasury Secretary Larry Summers called the proposal more “politically motivated than economically sound” and saw “no reason to do that other than to pander to generous special-interest campaign contributors.”
Bill Dudley, former president of the Federal Reserve Bank of New York, published an op-ed last week calling the BTC reserve plan “a bad deal for Americans.” The only point of such a plan would be “to push prices higher, not create value for the government.”
Dudley insists he’s not a ‘nocoiner’ and called on the government to issue sensible regulations governing digital assets. But he explains the downside of the reserve concept by asking you to imagine that “the US government’s imprimatur encouraged everyone to make [BTC] a small part of their investment portfolio–say, just 2%. The total value of global stocks and bonds is about $250 trillion, so 2% would require all Bitcoin to be worth $5 trillion, or $250,000 each. Double the portfolio allocation to 4%, and the price would need to double again.”
Bloomberg’s editorial board took a far harsher stance in a recent op-ed titled Donald Trump’s [BTC] Reserve Would Rip Off Taxpayers . The board said BTC “has no industrial use, no claim to actual cash flows, no connection to the real economy. It’s a purely speculative instrument. Its price depends entirely on what a greater fool is willing to pay.”
Creating a BTC reserve would “vastly enrich” existing BTC owners, while the government “would be playing the greater fool—at a cost potentially in the hundreds of billions of dollars … If Trump wants to reopen the crypto casino, so be it. But what happens in crypto should stay in crypto. Putting taxpayer dollars on the table could put millions of Americans at risk.”
On December 9, famed goldbug Peter Schiff suggested that outgoing President Joe Biden should sell all the BTC held by the federal government before he leaves office. It would help reduce 2024’s budget deficit and “put an end to all the nonsense about creating a harmful ‘strategic’ [BTC] reserve.”
Cold War 2.0
Proponents of the reserve strategy are now trying to frame the issue as a national security concern, echoing Trump’s July comment that “if we don’t do it, China and others are going to be doing it.”
The day before Eric Trump’s Abu Dhabi speech, he told CNBC that his father believed “every country in the world is embracing” digital assets, and if America didn’t join these countries, “we’re going to be left behind.”
Binance founder Changpeng ‘CZ’ Zhao used his appearance at the Abu Dhabi confab to suggest it was “inevitable” that China will establish its own BTC reserve. Zhao added that China would likely do so on the sly rather than pre-announce a plan, adding another layer of ginned-up urgency to this scenario.
The Cold War analogy got even hotter after Russian media reported that a member of the federal legislature (Duma) wants to create a strategic BTC reserve. Deputy Anton Tkachev proposed the idea not only as a means of shoring up the nation’s finances but also evading Western economic sanctions.
As Tkachev put it, “in conditions of limited access to traditional international payment systems for countries under sanctions, cryptocurrencies are becoming virtually the only instrument for international trade.”
It was only last week that Russian President Vladimir Putin praised BTC as a means of reducing the need to hold U.S. dollar reserves that America can seize at any time. Putin suggested BTC was superior to the dollar because “who can prohibit it? No one.”
The same might be said for America’s BTC reserve plans. Given Trump’s vicelike grip on the Republican party—which will control all three branches of government come January—it looks as if only Donald himself will be able to pull the brakes on this runaway car before it runs over a fiscal cliff. But best hurry before the Russkies or the Godless Chinese Communists wreck their rides first.
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