The Cryptocurrency Sector Faces a Deepening Rift Over Trump's Proposal to Create a U.S. Strategic Reserve of Digital Assets

The cryptocurrency sector, often unified in its push against traditional financial systems, is facing a deepening rift

President Donald Trump's proposal to create a U.S. strategic reserve of digital assets has ignited a deepening rift within the cryptocurrency sector, known more for its unity in pushing against traditional financial systems.

What Happened: First unveiled in early March, the plan, as part of Trump’s broader agenda to slash the deficit and optimize government spending, has sparked fierce debate over its implications for fiscal responsibility, economic equity, and the very ethos of the crypto movement.

As Trump's Department of Government Efficiency (DOGE), headed by Elon Musk, is simultaneously rolling out trillions in spending cuts, the contrast between these policies has sharpened divisions within the industry.

Some hail the initiative as a logical step towards broader institutional adoption of digital assets, while others are critical of using public funds to prop up a volatile asset class.

Trump announced in a Sunday post on Truth Social that five cryptocurrencies—Bitcoin BTC/USD, Ethereum ETH/USD, Ripple XRP/USD, Solana SOL/USD, and Cardano ADA/USD—will be included in the strategic reserve.

According to data from CoinGecko, Bitcoin surged more than 20% from the previous week’s lows to $92,000 by Monday, with other listed tokens also rallying sharply.

The task force, established via executive order on Trump's Inauguration Day, is aiming to cut $1 trillion from the deficit, according to Musk, who made the statement in a February 25 interview with Sean Hannity at Fox News.

DOGE has already claimed $55 billion in savings by February 24, with programs like USAID and DEI contracts at the Treasury being targeted, as highlighted on the department's official website.

However, the juxtaposition of these brutal cuts with a plan to buy cryptocurrencies—assets notorious for their rapid and unpredictable price swings—has led to accusations of inconsistency.

"The overall goal is to try and get a trillion dollars out of the deficit, and if the deficit is not brought under control, America will go bankrupt," Musk, the billionaire CEO of X, formerly Twitter, stated.

But these claims clash with the ongoing efforts to fund the crypto reserve, the price tag of which remains a subject of speculation. For instance, the Congressional Budget Office projects the federal deficit to reach $2 trillion by fiscal year 2025.

In February, Trump suggested exploring options like a debt ceiling increase or gold revaluation to finance the crypto purchases, as reported by CBS News. Yet, no concrete mechanism for these purchases has been legislated.

What Critics Are Saying: Some critics of the plan, like Samson Mow, CEO of JAN3, expressed skepticism over the rationale behind including altcoins like XRP and SOL.

Mow, known for his outspoken views on crypto and macro trends, voiced his criticisms on X, arguing that the selection of assets for the reserve was made with the aim of personally enriching specific projects.

"It’s clear no one cares about the U.S. strategic interest. They’re focused on enriching themselves. They'll buy 12M SOL, 20B XRP, and 125k BTC at the market rate. It's a personal fortune for them, and they couldn’t care less about the U.S. strategic interest," Mow stated in one post.

His comments sparked reactions from other X users. One user, @DemeterChain, pointed out the broader implications of such actions.

"It’s not about the coins. It’s about the people who will benefit from the coins. Who will be donating vast sums to political campaigns again in 2025?" they wrote.

Another user, @BitrueOfficial, highlighted the potential impact on the crypto market.

"It’s going to be interesting to see how this plays out. I think it could be a huge positive for the crypto market if it’s done right."

Why It Matters: This tension is unfolding as part of Trump's broader agenda to slash government spending and streamline operations.

Since January 20, immediately following his Inauguration Day, Trump has been rolling out a series of executive orders and administrative actions to streamline government agencies and programs.

This initiative, known as the Department of Government Efficiency (DOGE), is a key part of Trump's broader economic agenda, which also includes cutting taxes and rolling back regulations.

TIME magazine recently reported in February on how Trump's administrative actions have led to the slashing of tens of thousands of federal jobs and the closure of several agencies, including the Consumer Financial Protection Bureau.

The report by TIME also highlighted how Trump's government has been slashing discretionary spending.

According to Al Jazeera, the Trump administration is planning to cut $1 trillion in spending over the next 10 years, and it is also seeking to slash the social programs that form the bulk of the U.S. budget.

These programs, which include Social Security