Crypto's Next Bubble Will Be Politically Motivated

Donald Trump is known for loving 19th-century President William McKinley, whom he credits for improving the US “through tariffs and through talent.” Now there’s another connection. Trump’s proposed national reserve of cryptocurrencies, including Bitcoin and memecoin-focused Solana, is reminiscent of the fight for a monetary system backed by both silver and gold in McKinley’s day. The danger today is of a speculative bubble with risks to the US dollar — with looming McKinley-esque tariffs also adding to the pain.

A crypto reserve is uncharted territory for any country, let alone the US, and Trump has been vague about the details. Still, his language goes beyond building a Bitcoin stockpile or holding onto the $17 billion of crypto seized by US law enforcement. His explicit citing of other tokens such as Ripple suggests unprecedented government buying of digital coins that are hugely volatile and have been subject to regulatory scrutiny. It’s a hair-raising precedent on its own: Aside from the risk of loss, the Trumps have a stake in crypto’s success — including via Solana-based Trumpcoin – and such antics will fuel concern about grift and corruption.