By Anjali Kochhar
Elliott Management, a prominent hedge fund managing $70 billion in assets, has recently issued a stark warning regarding the U.S. government’s enthusiastic support for cryptocurrencies. The firm cautions that this endorsement is fueling a speculative bubble that could lead to significant economic turmoil upon its inevitable collapse.
In a recent letter to investors, Elliott Management criticised the government’s apparent zeal for digital assets, which have experienced substantial price surges despite lacking intrinsic value. The firm expressed concern over politicians who back cryptocurrencies that might one day challenge the U.S. dollar’s supremacy. “Crypto is ground zero for the speculative surge across markets, not only because of the size it has grown to but also because of its perceived proximity to the White House,” the letter stated. Elliott emphasised that the “inevitable collapse” of the crypto bubble “could wreak havoc in ways we cannot yet anticipate.”
This critique is particularly noteworthy given that Paul Singer, Elliott’s founder, is a longstanding Republican donor. In the 2024 election cycle, Singer contributed $56 million to conservative candidates, including a $5 million donation to the “Make America Great Again” political action committee supporting President Donald Trump. Despite his political affiliations, Singer has consistently voiced skepticism about cryptocurrencies, previously labelling them as “one of the most brilliant scams in history.”
Cryptocurrency prices have surged in recent months. Bitcoin, the largest digital asset, has risen from approximately $70,000 to over $100,000. This increase follows President Trump’s strong pro-crypto stance, including his promise to establish the U.S. as “the bitcoin superpower of the world.” After taking office, Trump signed an executive order promoting U.S. leadership in digital assets and financial technology, further fuelling the market’s growth.
On Wednesday, Trump Media, in which Trump holds a majority stake, announced plans to invest up to $250 million in cryptocurrencies and digital assets as part of an expansion beyond social media. This move signals deeper involvement in the crypto industry from Trump and his business ventures.
Elliott Management’s letter also highlighted concerns over the potential threat to the U.S. dollar’s dominance as the world’s reserve currency. The firm questioned why the government is supporting alternative currencies, especially when other nations are working to reduce their reliance on the dollar. The letter described any political support for marginalising the dollar as “profoundly dangerous,” noting the substantial sums spent to elect crypto-sympathetic politicians.
Furthermore, President Trump’s personal ventures have deepened their involvement in the cryptocurrency sector. Alongside his sons and longtime business partners. Earlier this month, both he and First Lady Melania Trump launched their own cryptocurrencies.
Additionally, Trump Media announced plans to expand beyond social media by launching a financial services division set to invest up to $250 million into cryptocurrencies and other assets.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.