Key Takeaways
The U.S. is officially treating Bitcoin as a matter of national security, with top defense officials describing it as a tool to project American power.
The Pentagon is actively using Bitcoin as a strategic weapon to counter geopolitical rivals, U.S. Secretary of War Pete Hegseth confirmed in a House armed services committee hearing on April 30. The price of Bitcoin was largely unchanged on the news, trading at $77,014, up 1.56% in the last 24 hours, according to CoinGecko data.
"I am a long enthusiast of bitcoin and crypto potential, and a lot of the things we are doing, enabling it or defeating it, are classified efforts that are ongoing inside our department, which do provide us a lot of leverage in a lot of different scenarios," Hegseth said in response to a question from Texas Representative Lance Gooden.
The revelation follows an admission earlier in the month from U.S. Indo-Pacific commander Admiral Samuel Paparo that the military is running a Bitcoin node. Paparo clarified the military is "not mining bitcoin" but rather "using it to monitor," highlighting the protocol's computer science applications for cybersecurity and its utility as a "peer-to-peer zero-trust transfer of value."
These developments formalize Bitcoin's role in U.S. strategic policy, a shift that began in 2025 when former President Donald Trump signed an executive order creating a U.S. strategic bitcoin reserve. The reserve was seeded with 200,000 BTC the government already held from asset forfeitures, with the order prohibiting their sale and directing the Treasury to find budget-neutral ways to acquire more.
The Pentagon's public comments signal a new phase in the geopolitical chess match between the U.S. and China, extending the rivalry from semiconductors and AI to digital currency. Gooden, who is working on a "crypto-forward" 2027 National Defense Authorization Act, framed the issue in stark terms, citing China’s "stockpiling substantial holdings as part of its strategic reserve" as a direct threat.
The strategic pivot draws on the "Softwar" theory popularized by former U.S. Space Force official Jason Lowery, who argued military power would eventually be measured by a nation's share of Bitcoin's hashing power. Lowery began working with Admiral Paparo at the United States Indo-Pacific Command in 2025. While the Pentagon is embracing Bitcoin, its relationship with other technology sectors, particularly AI, has been more contentious. Google recently withdrew from a $100 million drone swarm project after an internal ethics review, and let a previous AI contract, Project Maven, lapse after employee protests in 2018.
The official state-level validation could add a significant "geopolitical premium" to Bitcoin's price, similar to gold's role as a reserve asset. The market for Bitcoin futures shows a 4.7% probability of the price reaching $200,000 by the end of 2026, a figure that has remained stable.
"Anything that supports all instruments of national power for the United States of America is to the good," Admiral Paparo told lawmakers, directly linking Bitcoin to the nation's ability to "project power." This explicit endorsement from the highest levels of the U.S. military suggests a long-term strategic commitment that could reshape the landscape for digital assets.
This article is for informational purposes only and does not constitute investment advice.
