Undoubtedly, President Donald Trump’s decision to establish a Bitcoin and crypto reserve, drawing from the existing stockpile with more additions scheduled through “budget-neutral” strategies, has sparked heated debate.
At no point did the president or David Sacks, the AI and crypto czar, say they were bailing out cryptocurrencies like Solana, Ethereum, or some of the best coins to buy. However, critics are closely watching the potential implications of this reserve and what it means not only for crypto but also for the broader financial markets.
Trump officially established the crypto reserve via an executive order on March 7. It will comprise the Strategic Bitcoin Reserve and the Digital Asset Stockpile. Most of these coins will be those currently held by the government, seized primarily from criminals and firms accused of wrongdoing. As Sacks reiterated, no taxpayer money will be used to buy coins at this stage.
Is the Trump Crypto Reserve a Crypto Bailout?
For crypto supporters, the Bitcoin and crypto reserve is not a bailout in any way. If anything, crypto prices are volatile and will fluctuate depending on supply and demand.
Typically, a bailout involves direct government intervention to rescue failing industries or assets using public funds.
As currently structured, the crypto reserve does not meet this definition. The government is not buying any Bitcoin or altcoins at this stage. However, the reserve will be funded from the current Bitcoin haul of around 200,000 BTC. Moreover, when the government decides to buy BTC, it will not impose any cost on taxpayers.
While this structure is clear, some critics argue that the reserve is an indirect bailout and may even benefit certain stakeholders. Most importantly, they view it as a “backstop” for the entire industry, a mechanism through which the government can prop up prices, thereby supporting Trump’s associates.
Then again, if Trump goes against his word and sells Bitcoin, prices could crash, though this may not happen during his administration. When campaigning, he said his goal was to make America the crypto hub of the world, a comment he emphasized once more during the Crypto Summit at the White House.
https://twitter.com/SergeyNazarov/status/1898234830250279118
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Is Trump Manipulating Bitcoin Prices?
As it stands, crypto prices are volatile, rising and falling, sometimes based on Trump’s social media posts. The interpretation of his posts has often sparked price rallies.
Trump’s US Crypto Reserve manipulates the market➢ $300B+ wiped out ➢ $BTC heading to $30K Trump’s campaign claims the reserve will position the US as a crypto hub and lower national debt. Meanwhile, retail investors unknowingly serve as exit liquidity. pic.twitter.com/GxY5UmLglk
— vir (@httpslali_) March 9, 2025
On March 2, after posting that the United States would create a crypto reserve that would include altcoins like Solana, Cardano, and XRP, Bitcoin soared to as high as $94,000. At the same time, XRP, Solana, and other altcoins recovered strongly, lifting market capitalization above the $3.1 trillion mark.
However, ahead of Trump’s posts, there were suspicious trading activities. Although some of the best meme coins to buy could have been natural options for traders, there was a significant leveraged bet on BTC and ETH, raising questions about possible insider knowledge.
The president, his family members, and some of his associates indirectly control some of the top coins. Specifically, through World Liberty Financial, a DeFi platform, they hold diverse coins, including Bitcoin and Ethereum.
Sacks, on the other hand, was one of the early investors in Solana. Though he claims to have sold his holdings, his venture capital firm, Craft Ventures, is connected to five coins that may form part of the crypto reserve.
What fuels possible manipulation concerns is the timing and nature of Trump’s recent posts.
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https://twitter.com/DefiTokyo/status/1898473478556160012
Combined with his administration’s ties to the crypto industry, there are undoubtedly ethical and transparency concerns.
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