A close confidant of Elon Musk ripped into President Donald Trump’s plans to create a national cryptocurrency reserve funded by taxpayer dollars.
On Sunday, Trump announced the “holy grail” for digital currency purveyors: a “strategic reserve” of cryptocurrency that will allow the government to capitalize on the rise of the volatile digital assets.
Billionaire Palantir cofounder Joe Lonsdale, a close friend of Musk whose software company has numerous Defense Department contracts, took issue with the “principals” underscoring government spending on “crypto schemes.”
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“Taxation is theft. 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,” Lonsdale wrote in a series of posts on X. “Cut it out with these schemes guys.”
He added: “To be clear I am PRO CRYPTO. I own BTC [Bitcoin] and some of these. And I agree the SEC has been terrible, and that we should support the sector with clear laws and precedent. But to me, that doesn’t include government money buying in! Not the proper, principled role of government.”
In a third post, Lonsdale reminded his followers that he is a “HUGE supporter” of the Trump administration and backs the Department of Government Efficiency.
Under the Trump administration’s plan, the federal government would stockpile five tokens as the reserve’s base: Bitcoin, Ethereum, XRP, Solana, and Cardano. Trump said the reserve would “elevate this critical industry after years of corrupt attacks by the Biden Administration” and make the country the “Crypto Capital of the World.”
His decision is a huge boost for an industry that collectively contributed over $130 million to his re-election campaign, according to The New York Times. Across the entire global industry, the market capitalization rose about $270 billion to just over $3.18 trillion in the two hours after the announcement, according to CoinGeck.
Oskar Åslund, chief strategy officer at AKJ, a hedge fund platform, said that “a strategic reserve is the holy grail of the crypto market.”
“[It’s] everything they could hope for, going from a sort of experiment to the reserve currency of the U.S.,” he told the Financial Times.
But software developer Nikita Bier voiced concern in a reply to Lonsdale’s thread.
“This is getting egregious. Every 2 weeks there is a kickback to the family,” he wrote. “Completely delegitimizes all the work DOGE is doing.”
Cameron Winklevoss, who reportedly poured funds into a super PAC backing Trump’s re-election effort, expressed concern over the volatility of four of the five tokens picked by the president.
“While I’m excited about a Strategic Reserve, I was surprised by the digital assets being contemplated. Bitcoin is the only asset that meets the bar for a store of value reserve asset. Maybe Ethereum,” he wrote on X. “It’s possible other assets could make the grade in the future but it’s a very high bar.”
He suggested a workaround in which the government obtained digital assets through seizure and forfeiture, which is “much different than actively acquiring these assets in the open market.”
Indeed, shortly after taking office in January, Trump signed an executive order to create a working group to establish a national stockpile of digital assets “lawfully seized by the Federal Government through its law enforcement efforts.”
After Trump’s announcement on Sunday, the tokens all jumped in value: Bitcoin and Ethereum by 10 percent and XRP, SOL, and ADA by a whopping 62 percent.
Backers of the move say taxpayers would benefit from the reserve’s value, but it remains unclear how the reserve would work or when it would start. Trump said he had signed an order that “directed the Presidential Working Group to move forward on a Crypto Strategic Reserve.” More answers are expected after Trump hosts a first-of-its-kind crypto summit at the White House on Friday.
Critics of the move have also raised concerns over conflicts of interest. Both Trump and his crypto czar, David Sacks, are known to have owned vast quantities of various currencies, though Sacks took to X Monday to say he had sold off his holdings of Bitcoin, Ethereum, and Solana.
Even still, The New York Times’s DealBook reported growing worries that Trump’s open-arms policy could allow crypto bros to influence elections. “Could such an explicitly beneficial policy for crypto give them even more ammunition to influence future elections, further reshaping government in their favor?” the newsletter asked.
