President Donald Trump‘s recent crypto reserve plan has sparked discontent among his tech community supporters.

The plan, announced on Sunday, has led to a significant divide among his tech allies.

President Donald Trump's recent crypto reserve plan has sparked discontent among his tech community supporters, especially as it includes coins other than Bitcoin.

What Happened: The crypto enthusiasts were not pleased with President Trump's decision to form a strategic crypto reserve for the U.S., which will comprise not only Bitcoin BTC/USD but also other digital currencies such as Ether ETH/USD, XRP XRP/USD, Solana's SOL token SOL/USD, and Cardano ADA/USD, according to a report by CNBC on Tuesday.

While Trump's initial moves to cut regulations and form a digital assets working group were welcomed by the tech community, this recent move is seen as an overreach. The community had anticipated an exclusive strategic Bitcoin reserve, which would involve purchasing Bitcoin with cash, a decentralized currency seen as a viable alternative to hard money.

"I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve," stated Tyler Winklevoss, co-founder of crypto exchange Gemini, who had supported Trump during his election campaign.

Explaining the issue with other coins, Alexander Blume, CEO of Two Prime said, "They're not scarce in the same way and they're not decentralized in the same way. So it reduces the value and signal of creating a Bitcoin reserve.”

The decision to include riskier assets in the reserve has also faced criticism. Detractors argue that this could potentially enhance the net worth of a select group of coin owners, using U.S. taxpayer money. This is particularly troubling to those who support Elon Musk's mission to decrease government spending at the Department of Government Efficiency (DOGE).

Creator of blockchain startup Civic, Vinny Lingham wrote on X, "Call me old fashioned but I don't think the government should be pumping our crypto bags with taxpayer money while we are running a near $2trn deficit."

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Why It Matters: Previously, analysts at Bernstein expressed doubts about the U.S. expanding its crypto reserve beyond Bitcoin due to funding challenges, as reported. The rationale for including other assets remains unclear.

On the other hand, Strategy's Michael Saylor told CNBC that it was no surprise that the reserve included other cryptocurrencies too. "There's no way to interpret this other than this is bullish for Bitcoin and bullish for the entire U.S. crypto industry," stated Saylor.

To add to the concerns, David Bailey, CEO of Bitcoin Magazine, revealed that China was secretly discussing the creation of a strategic Bitcoin reserve. This could potentially put the U.S. at a strategic disadvantage if it does not focus on Bitcoin.

After a weekend rally, crypto prices on Monday witnessed a significant decline. Bitcoin dropped about 9%, while Ether fell 15%. XRP and SOL also saw substantial drops. This decline is believed to be linked to President Trump's confirmation of upcoming tariffs.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.