Crypto's Looming Threat: Elliot Management Warns of "Inevitable Collapse" Linked to White House Support
Activist investment firm Elliot Management has sounded a dire warning about the cryptocurrency market, suggesting it is teetering on the edge of an "inevitable collapse." The firm points to a "crypto bubble" inflated by perceived endorsements from the White House, especially during former President Donald Trump's administration, as a significant factor in this precarious situation.
Impending Crypto Collapse Ahead?
In a recent investor letter, Elliot Management articulated fears that the U.S. government's perceived backing of cryptocurrencies could fundamentally undermine the dollar's position as the world's primary reserve currency. The firm contends that the dramatic escalation in crypto prices, purportedly tied to Trump's promotion of digital assets, introduces substantial risks not only for individual investors but also for the broader global economy. The current market is characterized as highly "speculative," driven more by hype and momentum, particularly concerning "memecoins" that lack intrinsic value or substantial backing, rather than sound financial principles.
Concerns Mount Over US Dollar’s Future
Elliot Management specifically highlighted former President Trump's vocal support for crypto during his campaign and his family's involvement in various crypto ventures, including World Liberty Financial (WLFI), American Bitcoin (ABTC), and the official TRUMP memecoin. The firm cautioned that such high-profile endorsements could "profoundly dangerously" marginalize the U.S. dollar. Proposals from the Trump administration, like establishing a national reserve for digital assets, are seen as further complicating this scenario by potentially diluting the dollar's global economic influence and underscoring the urgent need for investor caution in this volatile market. Despite these stark warnings, the cryptocurrency market recently showed resilience, with Bitcoin (BTC) rebounding to trade above $113,000 after a period of consolidation. This unexpected upturn occurs amidst the passage of the GENIUS Act, the first crypto bill signed by President Trump, which aims to integrate the U.S. dollar with stablecoins and modernize the financial system. Major financial players like Morgan Stanley, Citi, Bank of America, and JPMorgan Chase have also indicated a willingness to engage with the crypto sector, suggesting ongoing efforts to establish a regulatory framework that could balance innovation with risk mitigation in digital asset adoption.
