Cryptocurrency
“When the situation was manageable it was neglected,
and now that it is thoroughly out of hand we apply too
late the remedies which then might have effected a cure.
There is nothing new in the story.
It is as old as the Sibylline books. It falls into that long, dismal
catalogue of the fruitlessness of experience and the confirmed
unteachability of mankind. Want of foresight, unwillingness
to act when action would be simple and effective, lack of clear
thinking, confusion of counsel until the emergency comes, until
self-preservation strikes its jarring gong. These are the features
which constitute the endless repetition of history.”
– Winston Churchill –
The Bottom Line
The United States government CANNOT, under any circumstance, be in the cryptocurrency business. NO taxpayer money should EVER be used to purchase crypto or be used as a backstop for what ultimately amounts to speculative bets.
There are many reasons why. For the most part, cryptocurrencies are nonproductive assets that, unlike stocks or bonds, don’t typically generate income or cash flow through productivity or their own business operations. This means that, since cryptocurrencies don’t produce anything tangible or offer returns like dividends or interest payments – essentially lacking any underlying economic fundamentals that drive their price – the value of crypto is primarily based on market speculation and the willingness (or unwillingness) of others to buy them.
Crypto is also extremely vulnerable to hacking, ransomware, and straight-up theft and is used heavily in things like sex trafficking, money laundering, ransomware, and scams in general. Plus, the crypto marketplace would quickly become just another battlefield, giving Iran, Russia, North Korea and China the perfect opportunity to compromise us by interfering in the crypto markets.
It is imperative that our traditional $100 trillion capital markets don’t get entangled with the cryptocurrency markets. Traditional finance money moving into this highly decentralized market vastly increases the risk that the volatility and unpredictability of the crypto market could poison the entire global financial ecosystem.
This includes stablecoins, or coins that back digital currency with short-term U.S. Treasuries, dollar deposits, or other cash equivalents. Although The Genius Act – a law passed by the U.S. Congress and signed by President Trump in July 2025 – requires issuers to hold $1 of liquid assets for every $1 stablecoin they distribute (this is sometimes referred to as 1:1 backing), taxpayer dollars are still going to be guaranteeing something that exists at least partially outside the traditional financing system.
Thanks to crypto that has been seized from cybercriminals and darknet markets, the United States is one of the world’s largest holders of cryptocurrency. President Trump wants a “strategic national bitcoin stockpile” to hold these tokens. This would be a mistake of gargantuan proportions, for all the reasons given above.
Most of the Trump family is now heavily involved in the crypto scene. The conflicts-of-interest, corruption, and legal landmines involved are unprecedented – and mind-blowing.
The Financial Innovation and Technology for the 21st Century Act (FIT21), passed by the U.S. House on May 22, 2024, would amend existing securities and commodity regulatory statutes to facilitate the use of digital assets. However, FIT21 is vastly insufficient because it fails to protect the crypto market against shady shenanigans like wash trading, where traders simultaneously (and illegally) buy and sell the same security to manipulate market prices.
On October 31, 2008, Satoshi Nakamoto released his nine-page thesis setting forth the basic structure of the bitcoin network to the world. Everything about Satoshi Nakamoto’s bitcoin brainchild is brilliant. Mining, the rewards, the blockchain…. it’s absolute genius.
Although we really do believe the concept of bitcoin is brilliant, we share Warren Buffet’s belief that bitcoin is “probably rat poison squared.” Whether or not you agree, it’s a stone-cold fact that the Wild, Wild West that is the crypto grand experiment has been terrifyingly volatile, zigzagging between dazzling rallies and breathtaking crashes.
After two smaller booms and busts, cryptocurrency experienced its first major crash in 2018, falling over 80 percent over the course of the year. After yet another bubble, cryptocurrency prices crashed 75 percent in 2022, losing $2 trillion of its $3 trillion in market capitalization. Then, at the end of 2024, Bitcoin, the dominant cryptocurrency, surged to over $100,000 a unit, an increase of 138 percent from the beginning of the year. Globally, cryptocurrencies now collectively have a market capitalization of around $3.5 trillion.
The volatility and uncertainty that haunts crypto isn’t likely to change any time soon because, for the most part, cryptocurrencies are nonproductive assets that, unlike stocks or bonds, don’t typically generate income or cash flow through productivity or their own business operations. This means that, since cryptocurrencies don’t produce anything tangible or offer returns like dividends or interest payments – essentially lacking any underlying economic fundamentals that drive their price – the value of crypto is primarily based on market speculation and the willingness (or unwillingness) of others to buy them.
This is just one reason the United States government CANNOT, under any circumstance, be in the cryptocurrency business. NO taxpayer money should EVER be used to purchase it or be used as a backstop for what amounts to purely speculative bets.