Trump administration is fueling Crypto Craze

According to reports, one of Wall Street’s most influential hedge funds is criticizing the Trump administration for fostering a cryptocurrency craze that could endanger investors.

It is reported on Friday that Elliott Investment Management, a roughly $70 billion activist fund with a combative reputation under Paul Singer, wrote a note to clients saying it “has never seen a market like this.”

The hedge fund claimed that cryptocurrency is “ground zero” for the craze it observes in financial markets, which includes high stock valuations and increasing interest in artificial intelligence, which pushes investors to behave “like a crowd of sports betters.” It further stated that cryptocurrency’s “perceived proximity to the White House” makes it significant.

Since the U.S. presidential election, the price of bitcoin, the most popular cryptocurrency, has increased by over 55% to over $104,000, but Elliot doesn’t seem to think the price increases will last. An “inevitable collapse” of cryptocurrency values that “could wreak havoc in ways we cannot yet anticipate” was mentioned by the hedge fund.

When President Donald Trump mentioned during his campaign that a strategic bitcoin reserve should be established in the United States, the cryptocurrency community took notice. He signed an executive order last week to establish a working group on crypto and assess the creation of a national digital asset stockpile.

Trump also introduced his own meme coin shortly before he assumed office, which drew criticism from the cryptocurrency community. First Lady Melania also introduced her own meme coin at the same time.

The potential harm that the White House’s excitement for cryptocurrencies could do to the dollar’s standing as the world’s reserve currency is one of Elliott’s concerns. Elliott noted that hundreds of millions of dollars have been spent to elect politicians who support cryptocurrency, pointing out that it is “extremely dangerous” for an elected figure to “marginalize the dollar.”

Conservative causes are often viewed as being supported by Elliot Management.

Over $66 million was donated in 2024 by Elliott Management employees, according to OpenSecrets, who supported a number of conservative candidates and charities.

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