This analysis was first published in SvD Näringsliv, in Swedish, on March 3rd, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
While Musk searches through the machinery of state looking for waste, Trump has found a new way to spend Americans’ tax money — on cryptocurrencies. This creates a new problem for those who believe in bitcoin.
“Many Americans don’t realise that the US government is one of the largest holders of bitcoin. Does anyone know this?”
Donald Trump is standing before an energised crowd at a bitcoin conference in Nashville in July 2024. He has just announced that he intends to fire Gary Gensler, a critic of cryptocurrencies at the country’s financial regulator. Jubilation erupts. He floats the idea of a strategic cryptocurrency reserve.
Fast forward to last weekend, and the shift is here. Trump announces he is going ahead with the strategic reserve. Yet the bitcoin enthusiasts are not happy. Why?
The reason the US already owns so much bitcoin is not strategic at all — it is simply the result of seizures and forfeitures in various criminal cases that have made the country a major holder of the cryptocurrency. The message that the US government would now accumulate even more bitcoin is one that lands well with bitcoin fans. It is the other cryptocurrencies they take issue with.
Over the weekend Trump posted on his social network Truth Social that he had asked a working group to proceed with the idea of a strategic reserve for cryptocurrencies. The currencies named were Solana, XRP, and Cardano. Trump then quickly followed up by adding that Bitcoin and Ethereum would also be included.
Outsiders tend to lump all of this together under the label “cryptocurrencies,” but within the industry the perspective is entirely different. Bitcoin — long claimed to be capable of functioning as an actual currency — has in recent years been repositioned as a kind of digital gold: an asset, rather than a currency. At the other end of the scale is the category more dismissively known as “shitcoins” — speculative projects that are neither asset nor currency, but something more akin to a lottery ticket with crypto technology at its core.
The underlying technology can therefore be used in different ways for different purposes. But the association between them contributes to the negative image many people have of cryptocurrencies as a whole. Enthusiasts had therefore hoped that Trump’s promised reserve would consist exclusively of Bitcoin — to distinguish it from the rest. Instead, it turned out to be the exact opposite.
How were the chosen currencies selected? Take XRP as an example. By the equivalent of market capitalisation it is one of the largest on the market, but the company behind it — Ripple — was investigated by the US financial regulator and paid over 1.3 billion kronor in fines. One possible explanation: Ripple spent over half a billion kronor on lobbying ahead of the presidential election.
In terms of money, the crypto industry as a whole was the second-largest lobbying force in the election cycle (after oil and gas companies). The industry saw an opportunity with Donald Trump as president — and now they are being paid for that investment.
A great deal of money has been invested in these cryptocurrencies and in the companies that work with them. Having the US government as a buyer is enormously positive for the entire ecosystem. This was visible immediately, as the price of several jumped by more than 20 percent in a single day. It amounts to a form of legitimisation for an industry that has had to stand in the corner for many years.
The biggest question of all is, of course, what the actual purpose of this reserve is. The executive order Trump signed claims that “the digital asset industry plays a crucial role in innovation and economic development in the United States.” There is very little to support that claim. If Cardano disappeared tomorrow, how many Americans would even notice? Nor is it a central part of the country’s innovation. None of the largest US tech companies deal in cryptocurrency at all — with the exception of Tesla, which holds a small amount of bitcoin.
The purpose most closely resembles a favour to an industry that gave Trump a great deal of support. And while Elon Musk tries to identify waste in the American state, tax money will now flow directly to buying cryptocurrencies — assets largely owned by a small number of people and companies. Beyond those specific beneficiaries, few can reasonably see any value in this reserve — strategic or otherwise.
