As Trump Drops Crypto Bomb, Market Talks Manipulation and Conflict of Interest
As Donald Trump dropped a somewhat expected crypto bomb this Sunday—prompting a rally in bitcoin (BTC) and other prices—the market is now trying to figure out what it all means while discussing signs of potential market manipulation and insider trading.
On Sunday, the President of the US posted on his Truth Social platform that, with his Executive Order on Digital Assets, he directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes bitcoin (BTC), ethereum (ETH), solana (SOL), and cardano (ADA).
BTC price in the past week:
While the industry mostly agrees that this reserve should consist of BTC only—while ETH might also be considered—industry players point out that it’s unclear what Trump is really trying to achieve here.
Laura Shin, a popular crypto journalist and author, stressed that "if you actually look at the text of the executive order, it said that he directed the working group to evaluate a potential stockpile, which is different from a reserve."
According to her, a stockpile consists of digital assets that the government obtains through law enforcement actions, whereas a reserve would require the government to proactively purchase the assets.
"So why does the latest post use the word 'reserve' as opposed to 'stockpile'? Also, why does it say that he directed them to do something that he clearly did not do if you look at the text of the [executive order]?" Shin asked, adding that it's also unclear why Trump framed it as something he did a month ago rather than presenting it as a new directive.
While some speculate that this announcement is merely a promotion for the Crypto Summit at the White House scheduled for this Friday, others point to more concerning practices by the current administration.
For example, traders have noted that the Trump family’s crypto project was buying both BTC and ETH ahead of the announcement, while someone made $7 million in one day by taking a long position in BTC and ETH with 50x leverage before the news broke. However, others have found that this might be a crypto scammer and not an insider.
Meanwhile, as the crypto market experienced a sharp downturn last week—with BTC prices briefly dropping below $79,000—Donald Trump's son, Eric, encouraged people to "₿uy the dips!!!"
Meanwhile, Derek Martin, founder of Pathfinder Research, a political research and competitive intelligence firm, noted that the Crypto Czar in Trump's administration, David Sacks, "has a massive conflict of interest with this announcement" and that this represents "a new level of corruption," as Sacks is "making a ton of money right now" due to Trump's announcement.
"So it begs the question—how much input did [David Sacks] have on which tokens are going into the strategic reserve?" Martin asked, while the Crypto Czar has yet to respond to these allegations.
According to Martin, Congress must investigate and determine whether David Sacks or Donald Trump's personal investment holdings are driving US crypto policy.
In either case, other analysts are debating a possible scenario: by announcing that the above-mentioned altcoins might be added to the reserve, Trump could simply be preparing for negotiations, with the final reserve consisting of BTC only.
"Whenever [T]rump needs to convince other stakeholders, he always starts with an absurd proposition that he can walk back from later: '[T]rump Gaza,' [C]anada annexation, and now 'strategic [C]ardano reserve,'" bitcoiner Udi Wertheimer said. Others suggest that crypto lobbyists may have simply convinced the president to add more altcoins to the reserve.
At the time of writing, BTC is trading near $92,000 and is up 7% in a day, while jumping around 17% from its weekly lows. However, the price is still down 4% in week and 10% in a month.