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The Strategic Crypto Swindle
- chairmansteve 2y agoThey would borrow dollars to buy crypto, thus increasing government debt.
- rtkwe 2y agoCould they take any currently seized bitcoins and just shuffle that sideways into a reserve? It'd break the main point of this though which imo is to boost the price of various crypto assets they're probably flush in since the Trump family personally just did two back to back memecoin rug pulls.
- nickthegreek 2y agoI believe that would be considered a stockpile. A reserve would mean new purchases. https://www.npr.org/2025/03/04/g-s1-51748/trump-crypto-reserve-bitcoin-stockpile-ether https://www.npr.org/2025/03/04/g-s1-51748/trump-crypto-reser...
- rtkwe 2y agoIn that vein the actual order never uses the phrase 'reserve' only stockpile. I'm not sure it would rule it out though you could start it with the existing assets and then actively manage it like a reserve. https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/ https://www.whitehouse.gov/presidential-actions/2025/01/stre...
- nickthegreek 2y agoI think one requires congressional approval (reserve), the other does not (stockpile).
- rtkwe 2y agoI mean they're not exactly following the separation of powers right now...
- rtkwe 2y agoAnother possible goal is to try to hamper any regulatory or legislative threats to crypto since it would affect a 'strategic resource'.
- kjksf 2y agoBuying Bitcoin is neutral to spend (or "debt" in your framing). If you "borrow" $100 and "buy" $100 with it, nothing has changed. You didn't spend anything hence you didn't incur any additional debt. If you buy $100 equivalent of Bitcoin then nothing changes either. Only future changes in Bitcoin price relative to dollar are changing your "debt". If price of Bitcoin goes down, you have a paper loss. If price of Bitcoin goes up, you have a paper gain. When you convert Bitcoin back to dollars, that paper gain or loss converts to a smaller or bigger debt. Strategic Bitcoin Reserve is motivated by the belief that the price of Bitcoin will go up drastically in which case the more Bitcoin U.S. buys today, the more debt it'll be able to reduce in the future.
- spankalee 2y agoAll it does it turn the government into a hedge fund making bets, while paying off crypto holders with taxpayer money along the way.
- kjksf 2y agoThe same argument applies to gold i.e. governments and central banks buying gold is just like a hedge fund making bets while paying off gold retail holders with taxpayer money. This is Status Quo Bias. If you accept that Bitcoin, like gold, is a hedge against devaluing currency, then it makes sense for China or US to stock up on Bitcoin just like they stock up on gold. Unlike gold, Bitcoin has a non-zero chance to supplant (or at least become a viable alternative to) US dollar as a global currency. In which case it's strategic for a country to own as much of such asset as possible.
- Aurornis 2y ago> If you "borrow" $100 and "buy" $100 with it, nothing has changed. You didn't spend anything hence you didn't incur any additional debt This is incorrect. You’re confusing a neutral net worth with a lack of debt. They’re not equivalent. If you borrow $100 then you have incurred $100 of debt. It doesn’t matter if you still have $100 in your hand, you still have $100 of debt to service. That last part is important: The government would have to service the interest on the money they borrowed. As time went on, the effective size of the debt will grow.
- dinkblam 2y agowould make more sense to call it the Anti-strategic reserve
- Terr_ 2y agoAnother place where the typical prefix seems to be insufficient lately: Un-constitutional versus Anti-constitutional.
- Terr_ 2y agoCompare: The Strategic Beanie-Baby Reserve. What does it accomplish? Betraying American taxpayers in order to enrich the manufacturer and collectors. P.S.: For that matter, why not the Strategic Russian Ruble Reserve? Sure, it means asking US taxpayers to suffer in order to prop up a warmongering dictator whose local propaganda is that America might need to be nuked, but modern Republicans think it'd be awesome 'cuz reasons.
- gs17 2y agoThe Beanie Babies could at least be burned for fuel if we were really desperate and no one wanted to buy them (and the government didn't want to play Santa). Crypto is almost the opposite, we burn fuel to get it and if no one wants to buy it, you couldn't even use it to make children happy.
- adeptusluminati 2y ago..."and if no one wants to buy it" It's a 3 TRILLION dollar market...so far! Looks to me like people want to buy it. For context, the Beanie Baby craze in the 90's at peak, was $2.6 Billion dollars adjusted for inflation today. Crypto is world wide phenomena, and so far, is 1000x larger. It also has utility for those that don't like bank lineups and banker's hours. PS. FYI The Atlantic has become an extreme left leaning digital publication (source: https://www.allsides.com/news-source/atlantic https://www.allsides.com/news-source/atlantic). It stopped writing balanced articles years ago. Too bad, because it used to be great.
- dboreham 2y agoScience experiment to test the hypothesis: there is no limit to corruption in the USA.
- MrMcCall 2y agoSaying "no limit" is like saying you can accelerate to the speed of light. There are physical limits, my friend.
- Terr_ 2y agoIt turns out that you can't oversaturate the local field with corruptons, they decay into larcenons.
- MrMcCall 2y agoIs it really larceny if there's no one to prosecute it, though?
- deleted 2y ago[deleted]
- Terr_ 2y agoAh, so it might be something else until an observer collapses the entanglement. Come to think of it, I think George Washington warned us about foreign entanglements, which is pretty prescient given that qubits hadn't been invented yet, only cubits.
- readthenotes1 2y agoThe good thing is that when someone drains the strategic crypto reserve for tactical advantage (digging for coins in the couch, so to speak), the USA will won't be hurt
- blitzar 2y agoStrategic reserves are marked at cost. (e.g. Gold is on the US balance sheet at $35 an ounce). Selling the crypto reserve will hurt the country if there is a loss.
- pants2 2y agoIf we have Fort Knox we might as well hold Bitcoin too. Whether or not it's Digital Gold is up for debate, but it's a self-fulfilling prophecy; the more countries that hold Bitcoin in reserve the more it becomes Digital Gold. That said, let's limit it to BTC. ETH at least isn't so insider-owned. The inclusion of ripple, solana, and especially cardano though is especially stupid. Those are majority owned by the "foundations" and a pump in price enriches a select few.
- adeptusluminati 2y ago[dead]
- wmf 2y agoFort Knox is also pointless.
- brokencode 2y agoAt least gold has real world uses, such as in electronics and spacecraft. Keeping large quantities of it safe for the future seems prudent, even outside its use as a value store.
- blandcoffee 2y agoI think perhaps you may have misread the article. Here are some items that stuck out to me: > As for American gold holdings, they’re essentially pointless: Fort Knox is a legacy of the days when the U.S. promised to exchange gold for dollars on demand. > More to the point, bitcoin was created to be an alternative to the dollar, not a support for it. Far from strengthening the dollar, having the U.S. purchase billions of dollars of assets that were created to be alternatives to the dollar would at best be economically pointless and at worst would actually weaken confidence in the dollar. so why other than fort knox, are you advocating for this position?
- kjksf 2y agoGold is not just legacy. Countries and banks (including central banks) are still buying gold as a hedge against dollar and other currencies. For example, "from November 2022 to April 2024, China reported adding about 314 tons to its reserves, bringing the official total to 2,264 tons by mid-2024". The logic for holding Bitcoin is the same as the logic for holding gold: a hedge against dollar and other currencies.
- la_fayette 2y agoI'm not an expert on the economics, but as of now, Bitcoin hasn't been hacked, which suggests it lives up to its promises. Personally, I find it incredibly useful to be able to carry my wealth anywhere on Earth, just by remembering a few words.
- miramba 2y agoMy credit card does that too, and I can buy things with it almost anywhere. There is also a system in place to restore access in case I forget the magic words.
- kjksf 2y agoUp to a (meager) daily / monthly limit. Unless you're Canadian protester and the government freezes your bank account. Unless you're American, like Melania Trump, and the bank decides to kick you out and take away your credit card because the politician sent them a letter threatening "oversight" if they don't kick out "risky" clients. Unless you trip bank's fraud metrics and they freeze your account for months, refuse to say why, ignore your attempts to contact them and fix it. Unless you're Russian and U.S. bans you from using international banking system. Other that that, there's no difference.
- desumeku 2y agoThey'll just say that these are all good things because they're political enemies who should be targeted anyway. I mean, Melania Trump? Russia? Obviously we should weaponize the financial system to target people that we don't like, and vehemently oppose any system that might threaten our ability to do that.
- paulgb 2y ago> as of now, Bitcoin hasn't been hacked We should be cautious about whether past precedent applies to future bitcoin, because the bitcoin halving mechanism ensures that bitcoin enters uncharted territory (with regards to the incentives at play) every four years for the next ~100. Satoshi's design was that bitcoin would be used as cash and transaction volume would provide the funds to secure the network. That largely hasn't happened (it's a "store of value" now, lightning exists, etc.), so mining incentives are still ~95-98% funded from the exponentially diminishing supply of new coins. Short of some institution stepping in to secure the bitcoin network by mining at a loss, it's hard not to imagine a 51% attack being relatively cheap on the time scale of decades.
- ChrisArchitect 2y agoRelated: Trump's 'Crypto Reserve' Is Such Brazen Corruption https://news.ycombinator.com/item?id=43261899 https://news.ycombinator.com/item?id=43261899 The “strategic reserve” exposes crypto as the scam it always was https://news.ycombinator.com/item?id=43236752 https://news.ycombinator.com/item?id=43236752
- boramalper 2y ago> On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. Embedded in this block was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks", which is the date and headline of an issue of The Times newspaper. We’ve now come a full circle where the US government is bailing out crypto bros.
- kjksf 2y agoThere are estimated 420 million owners of Bitcoin. The "crypto bros". We don't need governments to "bail us out". The value of Bitcoin rose from $0 to $2 trillion without ownership of large governments (small governments, like El Salvador, did benefit from that rise). It'll rise to $20 trillion without U.S. government buying it because we're still in very early days of Bitcoin adoption. People, companies, countries need Bitcoin much more than Bitcoin needs them.
- SketchySeaBeast 2y agoWho NEEDS Bitcoin? Sure, lots of people have got in on the speculation, which is really an argument against using it as a currency (can you imagine using a deflationary asset as a countries coin?), but why is there a need? What common use case does Bitcoin make better for the everyday person?
- desumeku 2y agoIt's like money, but better, and it can't have its value destroyed by the government through the insidious process of inflation.
- SketchySeaBeast 2y agoYeah, that doesn't answer my question, and it's not like money, it actively discourages spending it because it's cast as a rapidly appreciating asset.
- jgalt212 2y ago> What they hope for, in other words, is a handout for crypto holders—or, from the point of view of non-crypto-holding Americans, a misbegotten government backstop for purely speculative assets. Replace this with those who borrowed money for expensive degrees of specious value and the bondholders who will be repaid at par. History does not repeat itself, but it does rhyme.
- RealityVoid 2y agoThis take horrifies me. Furthering personal knowledge is not even in the same class as driving money on machines calculating random hashes for the sole purpose of proving they are calculating random hashes. I believe strongly in the power of education, an educated populace that is able to deeply hone it's craft and practice it's interest is the path to prosperity. I recoil at the kind of outlook you need to have to believe what this post seems to believe.
- jgalt212 2y ago> Furthering personal knowledge Take a poll of student debtors, and see what per cent of them regard their specious degrees as an exercise in "Furthering personal knowledge".
- yks 2y agoPro-reserve argument such as it is, is that the day will come when the trading partners of the US government won't accept dollars BUT accept bitcoins/cardano/solana/whatever? The former is definitely coming on accelerated schedule, but why would the latter ever come? The new industrial and trading hegemon (aka China) would demand trading in the currency under its sole control, and by proxy, that's what everyone will end up trading in.
- logifail 2y ago> As for American gold holdings, they’re essentially pointless I appreciate opinions on (physical) gold vary, but this seems particular line seems unnecessarily dismissive. Why does the author think the Strategic Petroleum Reserve make sense? It's not like the SPR is enough to rely on for very long should some massive unexpected/external shock shut down the ability of the USA to either produce or import oil/oil products.... (?)