If you are debating it, then you've lost.<p>That's what they want; it is the point of propaganda: To effectively disable your capability with distractions, in this case rabbit-hole debates about distractions and that lead nowhere. It's like directing the enemy force into a pathless swamp rather than to the battle.<p>The solution is that you need to define the merits, before you analyze the issue - just like you should define your own specifications before you talk to the salesperson. The merits of this issue are the cost (including the risk), economics, interference in free market, policy benefits/costs of establishing crypto, and most of all the corruption.<p>The other issue is the fraud and propaganda - why are they using propaganda? Is that an appropriate way to communicate with the public?
Naive take:<p>- doing something with all that seized crypto is probably a good idea. I've never heard of how it's actually used or managed but also never cared<p>- doing it as a strategic reserve of any significant value is multi-dimensionally insane given how technically blockchains work<p>- this is 100% a con. The only more obvious evidence would be to say he wants his own coin in the reserve
Probably the most straight-forward criticism of the idea I've run across is:<p>> <i>A strategic reserve makes sense if you can imagine a crisis where a crucial good - food, fuel, etc - would be in short supply: you want be able to release the reserve to meet demand.</i><p>> <i>But I cannot imagine a crisis where releasing an emergency reserve of crypto would do any good.</i><p>* <a href="https://twitter.com/stephenfgordon/status/1896360640291483714" rel="nofollow">https://twitter.com/stephenfgordon/status/189636064029148371...</a>
I'll fully willing to admit this is full conspiracy theory mode, but in these times it's felt more and more true:<p>Part of me worries that the plan here is a submarine "abolish the fed" plan from the crypto wealth, and another arm of demolishing US federal power in general.<p>* Run the economy and foreign trade so poorly that the USD tanks, which if you're 'lucky' and do it quickly enough also tanks all fiat that uses the USD as a reserve currency.<p>* Everyone switches away from fiat for reserve in exchange for a host of other stores of wealth, probably including crypto (that you ostensibly already own, and you cement your own power).<p>* You get rid of the fed, and the central bank idea in the US, cutting a major instrument of federal power. Or maybe you leave them around in name, but they're worthless to the point that they're almost a vestigial arm of the state.<p>* You're left with a major pillar of the end goal for a lot of the crypto wealth, which is an ultra balkanized world of a mesh of loosely federated city states.
Honest question from someone who doesn't know much about crypto stuff:<p>What about the whole majority control thing? If another nation decides to scoop up a "controlling share" could they somehow gain control of the ledger? Could that be part of the reasoning in any way?
David Sacks has been pretty shameless about this whole thing. He's disingenuously framing previous sales of seized crypto has having "lost" billions of dollars due to the value of those projects later increasing - as if it would have any value to the government if it weren't sold at all. Even if this "strategic reserve" is only ever funded with seized crypto, people like him still benefit from those seized tokens being kept off the market.
While I'm mostly indifferent on the government holding strategic reserves of gold (which they already do) or gold-like digital assets (which is being proposed) I don't think Cliff Asness's opinion should sway you either way.<p>Finance media loves the appeal to authority fallacy, but it's important to know anytime you ask someone who runs a fund their opinion, they're talking their book. Hedge funds make money on management fees, not on being right about everything.<p>Cliff Asness is in the anti-gold camp and runs a long-short hedge fund almost exclusively based on the five-factor research. Obviously he wouldn't like to promote the idea of long-only gold (crypto or otherwise), that's not a fund AQR sells.<p>You can just as easily find a hedge fund billionaire with the opposite opinion, ie. like Ray Dalio who is in the gold camp and sees it as a diversifier, and surprise surprise this is a selling point to his institutional investors who are also in that camp.<p>What do either of these billionaires opinions mean for what you should think about this idea from first principles? Nothing.<p>Is it non-productive and stupid that gold and bitcoin have value? Yes. Are the people touting both usually annoying? Yes. But it doesn't change the fact that they have historically offered uncorrelated positive returns.
My understanding of the executive action is that it authorizes this sovereign wealth fund as a place to store the Bitcoin that US authorities seize from criminals; that the Treasury is allowed (but not required) to develop a budget-neutral plan to purchase more Bitcoin; and that key people involved have stated that they never want the reserve to be liquidated.<p>I think you can definitely slippery slope your way into finding a problem with this, but it seems pretty reasonable to me. The government had all this bitcoin anyway. They've definitely sold some of it over time, but otherwise its just rotting in evidence lockers somewhere. We could definitely have a better plan in place to sell it, but that's boring.