Key Points
- U.S. Defence Secretary Pete Hegseth recently revealed confidential Bitcoin projects.
- These programmes’ goals are unclear.
- However, it shows that the military values Bitcoin.
Pete Hegseth’s Bitcoin Comments and Why They Matter:
Defence Secretary Pete Hegseth acknowledged the use of Bitcoin (BTC +0.61%) during a House Armed Services Committee hearing on April 30. It is, in some manner, vital to the national security of the United States.
Asked about whether the U.S. is gaining a strategic advantage over China in cryptocurrency, Hegseth said: “A lot of the things that we are doing, whether we are enabling it or defeating it, are classified efforts that are ongoing within our department that do give us a lot of leverage in a lot of different scenarios.”
This is the first time that a serving defence secretary has called Bitcoin a tool of national power. This is a big deal for investors, and it’s hard to overestimate the significance, so let’s break down what we know and what it implies.
What was just disclosed
Bitcoin has gained significance in geopolitics in recent months. Hegseth’s congressional testimony came after Representative Lance Gooden (R-TX) labelled Bitcoin as having “evolved from a fringe asset into a matter of national security”, noting Iran’s requests for Bitcoin as tolls for transiting the Strait of Hormuz and China’s accumulation efforts.
The comments follow an assessment from Admiral Samuel Paparo, head of U.S. Indo-Pacific Command (INDOPACOM), who earlier in April stated the military maintains a live node on the Bitcoin network to evaluate applications for safeguarding networks.
Paparo saw Bitcoin as a cryptographic and proof-of-work (PoW) mechanism, not as an asset class – a fascinating and little-discussed view, at least outside philosophical conversations among small circles of crypto developers.
These are the most explicit remarks ever made to Congress by Pentagon officials about Bitcoin, describing it as so important that it warrants regulation for national power.
Certainly, military commanders are now contemplating and discussing Bitcoin in ways they weren’t previously at least out in the open.
But, as attentive readers will see, the details of what all this talk truly implies are still rather hazy. Bitcoin’s blockchain has been under surveillance for a long time. And it is not new for the military to care about assets it considers critical to its country.
Even with strong indicators that there is at least one new Bitcoin-focused government initiative that could be used to deliberately alter the coin’s price, we don’t yet know enough to determine the type or breadth of the government’s efforts to influence it.
There is no indication that the Pentagon is looking to create a coin hoard beyond the Strategic Bitcoin Reserve (SBR), which was established by presidential order in March 2025 using coins from forfeitures, not from purchases made with government funds.
These tidbits could ultimately expand the investment thesis.
“The main takeaway for investors is that Hegseth’s comments, combined with Admiral Paparo’s previous testimony, underscore the importance and lasting value of Bitcoin as an asset. ” Obviously, if the currency is actually something one of the world’s major military powers seeks to control, or at least is trying to develop the means to control it in the future, it has value.
The more conventional case is that the coin’s scarcity, combined with expanding institutional demand through vehicles such as Bitcoin exchange-traded funds (ETFs) and corporate treasuries, will keep its supply in check, supporting higher prices over time. That expansion of the thesis is based on
Maybe there’s another country out there that considers Bitcoin an infrastructure worth fighting for. The U.S. has around 328,000 bitcoins, while China is thought to have roughly 194,000, despite the commodity being essentially prohibited there.
Russia accounts for around 16% of the world’s bitcoin mining capacity, while China accounts for almost 12% despite the ban. Scarcity premiums tend to rise as competition among sovereign actors for a limited resource intensifies.
But there is a danger here. It is this reputation for being independent of any single holder or country that makes Bitcoin valued worldwide. “If Bitcoin becomes an American strategic tool, then that neutrality could be lost, which means in practice that the buyers among the strategic competitors of the U.S. may not be as inclined to buy it.
Nevertheless, the thesis of Bitcoin does seem to be acquiring another layer of official legitimacy (perhaps surprisingly).
If you already have any, it doesn’t detract from the reason for owning them. And if you’re on the sidelines, there is one more data point for some exposure.
This Tech Could Be Worth 18 Nvidias
The CEO of Nvidia has said there’s one discovery that might produce more billionaires in the next 5 years than the internet did in 20 years.
The effect is ‘impossible to overestimate’, Amazon’s Jeff Bezos says. Cathie Wood sees the potential for AI to reach $80 trillion by 2030. That’s comparable to 18 Nvidias, 21 Microsofts, or 33 Amazons. But what most investors overlook is that practically all that growth goes via a single choke point.
One little-known business, an “Indispensable Monopoly”, supplies the crucial technology that Nvidia, AMD, and Intel cannot operate without. And it’s still a fraction of Nvidia’s size. We recently published a whole new report with the firm name and the entire narrative.