David Sacks, U.S. President Donald Trump’s “AI and Crypto Czar”, speaks to President Trump as he signs a series of executive orders in the Oval Office of the White House on Jan. 23, 2025 in Washington, DC.
Anna Moneymaker | Getty Images
The Trump-tech alliance is showing its first real sign of distress. And it’s because of crypto.
President Donald Trump counted on crypto execs and investors for a hefty portion of his 2024 campaign funds. He promised to reward them handsomely if elected by slashing regulations and by turning the U.S. into “the crypto capital of the planet and the bitcoin superpower of the world.”
The president got off to a quick start, signing an executive order calling for the establishment of a working group on digital assets and pardoning Silk Road creator Ross Ulbricht. The SEC also dropped its yearslong probe into Coinbase.
While those moves were lauded by the most vocal techies who backed Trump’s candidacy, over the weekend the president took it a step too far in their view. In a post Sunday on Truth Social, Trump announced the creation of a strategic crypto reserve for the U.S. that would include not just bitcoin but several other digital currencies — ether, XRP, Solana’s SOL token and Cardano’s ADA.
For the most part, Trump’s crypto backers all wanted a strategic bitcoin reserve. Such a move would entail using cash to buy bitcoin, which is widely viewed by crypto enthusiasts as a smart way to deploy capital into a decentralized currency that’s an alternative to hard money. As Coinbase CEO Brian Armstrong wrote on X, bitcoin offers a “clear story as successor to gold.”
By going well beyond bitcoin, the critics say, Trump would be using U.S. taxpayer money to buy much riskier assets that have unproven value and have the potential to bolster the net worth of a select few investors who own the coins. That’s all the more problematic to those who want to axe government spending by trillions of dollars, in support of Elon Musk’s cost-cutting mission at the so-called Department of Government Efficiency.
“Taxation is theft,” wrote Joe Lonsdale, founder of venture firm 8VC and a vocal Trump supporter, in a post on X. “It should be kept to a minimum. It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”
David Sacks, the venture capitalist who was tapped by Trump to be the White House artificial intelligence and crypto czar, took exception to Lonsdale’s comment, suggesting it’s premature to jump to any conclusions. Sacks and Lonsdale are part of the same conservative circle in the tech world, with Musk and Peter Thiel at the center.
“Nobody announced a tax or a spending program,” Sacks wrote, in response to Lonsdale’s post. “Maybe you should wait to find out what’s actually being proposed.”
The White House didn’t respond to a request for comment.