Hedge fund giant Elliott Management has warned that the White House's pro-crypto stance is fueling an unsustainable market bubble. And this can cause serious financial disruption when it collapses.
This concern comes amid Donald Trump's pro-crypto stance.
Elliott Says Crypto Is ‘Ground Zero’ for Speculative Frenzy
The Financial Times reported the hedge fund’s warning, citing a letter to investors. According to the report, Elliott warned that the speculative mania around digital assets, amplified by political support, poses an imminent financial risk with unpredictable consequences.
The $70 billion hedge fund founded by billionaire Paul Singer has criticized the U.S. government’s growing alignment with cryptocurrencies. Specifically, Elliott argued that such assets lack fundamental value but have surged due to perceived closeness to the White House.
In this context, the company warned that embracing digital assets could marginalize the US dollar. In its view, the global reserve currency is a dangerous policy direction.
According to the letter to investors, Elliott said it has “never seen a market like this.” The firm pointed to the AI-driven stock rally and the rising prices of cryptocurrencies as evidence that investors are behaving irrationally. It singled out crypto as the epicenter of the speculative surge, describing it as an asset without “substance.”
Hedge fund says crypto is “at dangerous levels”
The hedge fund believes the crypto industry has grown to dangerous levels due to the White House's endorsement.
“Crypto is ground zero…it could wreak havoc in ways we cannot yet anticipate,” the report quoted Elliott as saying.
Elliott's criticism is notable given Singer's political connections. Despite being a longtime Republican donor and contributing $56 million to conservative candidates in the 2024 election cycle, Singer has frequently expressed skepticism about cryptocurrencies.
The hedge fund now argues that political support for digital assets, particularly under the Trump administration, has exacerbated reckless speculation.
Beyond policymaking, Trump’s personal and business dealings have deepened his ties to the crypto sector. With his children and associates, Trump has backed World Liberty Financial (WLFI), a cryptocurrency platform launched last year.
Trump goes all in on crypto
He and the First Lady also introduced memecoins, TRUMP and MELANIA, respectively, introducing a speculative class of cryptocurrencies with no inherent value. Similarly, Trump Media, where the former president holds a majority stake, has also announced plans to invest up to $250 million in crypto. These actions, Elliott warns, have further legitimized speculative behavior in the market.
Additionally, pro-crypto lobbying has increased, with Fairshake PAC spending $173 million in the 2023-2024 election cycle to support crypto-friendly candidates. The advocacy group has a $116 million war chest for the 2026 midterm elections.
The article Hedge fund warns of crypto bubble with White House policy was first seen on BeInCrypto Brasil.
