VCs: Trump’s Crypto Reserve Could Shape Global Trends

The initiative to establish a national digital asset reserve is seen as a significant signal for the broader crypto industry. However, Rob Hadick, General Partner at Dragonfly, cautions that resistance from economic advisors and government officials could limit its impact, potentially disappointing market participants.

A key challenge in creating a national cryptocurrency reserve is the extensive timeline for its execution. The project’s initial evaluation phase alone is expected to take six months, not including the legislative changes required to move forward. Despite these hurdles, investors remain optimistic, predicting that the establishment of a U.S. digital asset reserve could inspire other countries to adopt similar strategies.

“If they wanted to, they could likely finalize the framework within weeks, taking inspiration from crypto's ethos of fast execution. We do anticipate that they will proceed with establishing a reserve and that it will include the purchase of crypto assets, starting with Bitcoin and potentially expanding to other digital assets over time,” said Boris Revsin, general partner and managing director of Tribe Capital.

However, the launch of the TRUMP token has been met with far less enthusiasm compared to his cryptocurrency executive order. While the executive order is seen as a progressive step toward technological advancement, the TRUMP token has been criticized as a speculative project with both social implications and significant financial risks.

Reports suggest that approximately 80% of TRUMP tokens are controlled by organizations linked to the U.S. president. This raises concerns that large-scale token sales for profit could lead to accusations of fraud and profiteering at the expense of everyday investors.

“And it will only strengthen the claims that this was a serious ethical violation and it will create even more crypto partisanship. So for the sake of all of us, I hope he doesn't,” remarked Rob Hadick, general partner at Dragonfly.

Despite the token’s official announcement on social media, Donald Trump has taken steps to distance himself from the project. Some investors speculate that he is fully aware of the potential reputational harm and legal risks associated with offloading the token, making it highly unlikely he would pursue short-term financial gain at such a cost.

It’s worth noting that memecoins like TRUMP typically lack fundamental value, even when tied to well-known personalities. They are best viewed as speculative tools, with traders seeking to profit from news cycles or high-profile associations rather than any inherent utility or long-term potential.