I’ve been managing money for 33 years now with some modest success. While there are some worthy competitors, it’s hard for me to remember a much worse idea than the U.S. launching a “strategic cryptocurrency reserve.” Nevertheless, on Thursday, President Donald Trump issued an executive order calling for just such a fund. David Sacks—Trump’s crypto czar—tweeted that the reserve would be “like a digital Fort Knox,” perhaps forgetting that the U.S. has been off the gold standard since 1933. In any case, his words do not diminish my scorn for this dangerous boondoggle, as I will explain below.
A sovereign wealth fund for the U.S., which President Trump has also begun planning, is inappropriate, unneeded, likely harmful, and potentially quite corrupt. But a strategic cryptocurrency reserve looks at a “normal” sovereign wealth fund and says, “Hold my beer,” as we are going to plaid.