Former New York Fed President Bill Dudley said that since Trump won the US Presidential Election, the price of bitcoin has risen by more than 40%, in part because of hopes that he would support the establishment of a government reserve of the cryptocurrency. He supported the idea during the campaign, and pro-cryptocurrency lawmakers have proposed ways to make it happen. It's hard to imagine how this would benefit most Americans. But what good would building a bitcoin reserve do for the government, or for people who don't own bitcoin? Not much good. There is no exit strategy, so the purpose is to drive up inflation, not to create value for the government, which would be forced to hold volatile tokens that would not generate any revenue. To finance the purchase, the Treasury would either have to borrow (thereby raising the cost of servicing the debt), or the Fed would have to create money (thereby fueling inflation). The latter would be little different from the Fed monetizing US government debt (as would directing the Fed to dip into the government's gold reserves under congressional legislative proposals). If the Trump administration really wants to support the fledgling cryptocurrency industry, it should develop a set of laws and regulations that will allow it to grow and operate safely.