Trump Team’s Crypto Flirtation Is Much More Dangerous Than Cabinet Picks

By stockpiling bitcoin — the most popular crypto — inside the vaults of places like Fort Knox, the US government is sending a message to the world

The hand-wringing over some of President Trump’s Cabinet picks would be funny if it weren’t for what the opposition is missing: Team Trump flirting with something much more dangerous in making crypto part of the nation’s so-called strategic reserve.

Most Americans don’t know what this means but they should.

By stockpiling bitcoin — the most popular crypto — inside the vaults of places like Fort Knox, the US government is sending a message to the world: An alternative asset is as safe as the US dollar.

That’s the word I’m getting from some smart market types, who I might add, believe in crypto, want to see advances in its blockchain technology to make transactions cheaper and more efficient but also see how Trump and his people are playing with fire on this one.

We are literally undermining global allegiance to King Dollar; when the US government gives its stamp of approval for a digital coin, it’s signaling to the world to think twice about investing in US-dollar denominated assets like our debt because crypto is the new thing.

It’s a terrible message.

For starters, we still live in a country addicted to debt that we need foreigners to buy and they are willing to do so for many reasons, including the US is a great safe haven with a stable “reserve” currency.

As such we want the dollar to remain as the world’s reserve currency for the simple reason that we will be selling more debt even under Trump.

The Elon Musk-run DOGE won’t solve the spending problem that is producing a $2 trillion deficit even in a growing economy overnight.

And it may never.

It’s unclear if the president is serious about tackling entitlement spending, stuff like Social Security, Medicare and the like that are on auto-pilot and comprise the largest part of the nation’s largesse that have lumped on future generations with $36 trillion in outstanding borrowing that will, at least for the immediate future, keep growing.

You also have to ask yourself why the Democrats — who love spending — aren’t all over this issue and instead are wasting time twisting Robert F. Kennedy Jr.’s words on the polio vaccine and grilling Tulsi Gabbard and Kash Patel for whatever.

No inherent value

There are valid reasons to push and prod and maybe vote against each of these candidates, but they aren’t existential threats to the country and it’s all important economy the way trying to equate crypto with the dollar will be if that’s what Trump does.

Republicans should be concerned for different reasons.

Why in God’s name ever risk debasing our currency before our new Treasury Secretary Scott Bessent gets his 3-3-3 plan going.

It’s aimed at cutting the budget deficit to 3% of GDP (it’s now more than 6%), revving up economic growth to 3% (currently close to 2%) and increasing oil production by 3 million barrels per day.

It won’t happen overnight, which means we still need access to the borrowing markets that this idiotic crypto reserve talk could make exponentially more difficult.

I should point out that the country has always had some commodities in its strategic reserve.

Oil for obvious reasons, and gold, of course.

The latter has been a traditional source of value for centuries, and at one point, the dollar’s value was implied through the price of gold, the so-called gold standard.

Bitcoin is different; it has no inherent value, and at best it’s an alternative currency to the dollar.

The blockchain that transacts in bitcoin is a competitor to the banking system.

So in a sense both both bitcoin and the blockchain are in competition with the US financial system.

A bitcoin reserve literally conveys credibility to a currency that is competing with the dollar for reserve currency status — international transactions are made in dollars which means people need to hold them in some form.

“It’s a stupid idea,” one top money manager, and crypto advocate, said about any talk of equating the dollar with bitcoin, which the reserve would begin to do.

This money manager is all for crypto and deregulating it.

He believes it should be part of a balanced portfolio.

It should not be a dollar replacement, real or implied.

“We’re literally telling global investors it’s better to put your money in crypto than dollar-denominated assets like our debt,” he said.

To be fair, Trump is not yet all in on a bitcoin reserve, which some in Congress want; people like GOP Sen. Cynthia Lummis of Wyoming, who proposed legislation that Trump had spoken favorably about.

Trump courted crypto honchos during the 2024 campaign and promised to dere