Trump's national security speech didn't mention cryptocurrency at all! The "crypto president" fails to deliver, triggering a sell-off

Former US President Trump often refers to himself as the “crypto president” and this year even made headlines by establishing a national Bitcoin reserve. However, last week’s release of the National Security Strategy (NSS) made no mention of blockchain or cryptocurrencies. This “digital silence” immediately triggered a chain reaction: Bitcoin plunged below $90,000 over the weekend before slightly rebounding, as the market began to reassess Washington’s calculus between geopolitical strategy and financial hegemony.

Selective Silence in the National Security Strategy: AI Upgraded, Blockchain Downgraded

The Trump administration’s differentiated approach to various technology sectors in the NSS is stark. The NSS explicitly demands that the US maintain dominance in AI standards and supply chains, considering it as important as nuclear deterrence. The document dedicates an entire chapter to the strategic role of artificial intelligence in defense, intelligence, and economic competition, requiring the Department of Defense, Department of Energy, and NSA to coordinate AI R&D. Quantum computing and biotechnology receive similar levels of attention.

By contrast, cryptocurrencies and blockchain are sidelined, mentioned only in passing in the “Financial Innovation” chapter. This linguistic shift reflects a tug-of-war over jurisdiction: if cryptocurrencies are classified as a core national security issue, the Department of Defense would lead policy; if left as a financial matter, the Treasury and SEC retain control. The document opts for the latter, signaling that the White House does not currently consider Bitcoin a strategic asset worth military defense.

This selective approach stands in sharp contrast to Trump’s campaign promises. On the campaign trail, he pledged at the Nashville Bitcoin conference to make the US the “crypto capital of the world” and to establish a national Bitcoin reserve. Yet when those slogans needed to be translated into formal national security documents, cryptocurrencies were deliberately downplayed. This disconnect has raised doubts about the credibility of Trump’s crypto policies.

In May, CIA Deputy Director Michael Ellis emphasized, “Cryptocurrency is a key area in our competition with China.” The urgency felt by the intelligence community ultimately did not make it into the top-level strategy, showing that presidential will is still constrained by traditional national security frameworks. This suggests that for Pentagon and intelligence bureaucracy, cryptocurrencies rank far below “hard tech” like AI and quantum computing. Bureaucratic inertia may be the real reason for crypto’s exclusion.

Comparative Emphasis on Technology Sectors in the National Security Strategy

Artificial Intelligence: Entire chapter devoted, equated with nuclear deterrence, DoD mandated to lead R&D

Quantum Computing: Clearly identified as a strategic competition area, focus on supply chain security and tech embargoes

Biotechnology: Included in a biosecurity framework, strategic value of vaccines and gene tech highlighted

Cryptocurrencies and Blockchain: Mentioned only in the financial innovation chapter, not elevated to national security level

Bitcoin Falls Below $90,000: Market Reads Strategic Ambiguity

Bitcoin’s drop below $90,000 after the NSS release was no coincidence. The market had high expectations for Trump’s crypto-friendly policies, with Bitcoin surging to a historic $126,000 high in October. However, when top-level strategy documents take an evasive approach toward crypto, investors start to worry that these friendly policies may be mere campaign rhetoric rather than long-term strategic commitments.

CME data shows traders still see an 88.5% chance of a 25 bps Fed rate cut this week, but if long-term military spending drives up inflation, room for further cuts may be limited. This is the deeper cause behind Bitcoin’s price correction. The NSS demands NATO allies raise defense spending from 2% to 5% of GDP, with the US’s own defense budget set to rise accordingly. Such military expansion will inevitably increase government borrowing or taxes—both negative for economic growth and asset prices.

Wall Street interprets this as a prelude to government borrowing and inflationary pressures, prompting funds to exit liquidity-sensitive assets, with crypto as the first casualty. As the most volatile asset class, Bitcoin is often sold off first when macro uncertainty rises. Additionally, institutional investors often reference government strategy documents in their allocation decisions; the NSS’s cold shoulder to crypto could prompt some conservative institutions to reevaluate their crypto asset exposure.

CoinDesk commentary suggests that excluding crypto from the core of national security may be a form of “strategic ambiguity.” If Bitcoin were officially designated a national security asset, the next step might be military-grade scrutiny and regulation—not good news for a free-flowing market. For now, this omission keeps Bitcoin on Wall Street’s stage, not the Pentagon’s, offering the market an alternative perspective.

Military Spending Expansion and Inflation Expectations: Bitcoin Faces Macro Headwinds

The NSS’s requirement for NATO allies to sharply increase defense spending has far-reaching implications for the global economy and financial markets. Raising the GDP share from 2% to 5% means major European nations would need to spend hundreds of billions of euros more each year. This will be funded by government borrowing, higher taxes, or budget cuts elsewhere—all negative for economic growth.

For the US, while the document does not state a specific defense spending target, the logic behind asking allies to increase spending inevitably applies at home. The current US defense budget is about $800 billion, or roughly 3.5% of GDP. Raising this to 5% would mean an additional $400 billion in annual spending. Such fiscal expansion is rare in peacetime and would inevitably further widen the federal deficit.

US national debt now exceeds $35 trillion, with annual interest payments over $1 trillion. Additional military spending will increase borrowing needs, likely pushing up long-term Treasury yields. Higher yields raise financing costs across the economy, putting pressure on stocks and risk assets like crypto. More importantly, large-scale government spending typically drives up inflation, which will limit the Fed’s ability to cut rates.

Bitcoin is traditionally seen as an inflation hedge, theoretically benefiting from rising inflation expectations. However, when inflation is driven by government deficits and military expansion, things get more complicated. This “bad inflation” is often accompanied by slowing economic growth and rising rates, putting pressure on all asset classes. If inflation gets out of control, the Fed may be forced to hike rates again—a deadly blow to volatile assets like Bitcoin.

For investors, the focus is no longer on Trump’s campaign slogans, but on bond yields and NATO’s defense bill. Bitcoin price forecasts are now embedded in the macro matrix; as the arms race and fiscal deficits heat up together, every “blank space” in national security documents adds a hidden cost in the market’s mind. CME data may show the market expects short-term rate cuts, but the long-term yield curve is already steepening, reflecting concerns about future inflation and fiscal pressures.

Dual Interpretations of Strategic Ambiguity: Regulatory Vacuum or Deliberate Omission

Excluding crypto from the core of national security strategy can be interpreted in two completely different ways. The pessimistic take: Trump’s support for crypto is just campaign rhetoric, blocked by resistance from traditional security and financial bureaucrats when it comes to formal national strategy. This suggests there may be no substantive crypto-friendly policies in the future, and promises like a national Bitcoin reserve may turn out to be empty talk.

The optimistic take: this is “strategic ambiguity,” deliberately keeping crypto in a regulatory gray area to maximize market freedom. Should Bitcoin be officially designated a national security asset, the next step would likely be military-grade scrutiny and controls, including transaction monitoring, background checks on holders, and even asset freeze powers in emergencies. Such measures could be disastrous for a decentralized, freely flowing crypto market.

CoinDesk’s commentary leans toward the latter view. For now, this omission keeps Bitcoin on Wall Street’s—not the Pentagon’s—stage, allowing crypto to continue developing as a financial innovation and investment vehicle, rather than being subject to the tight control of the national security apparatus. In the long run, this “regulatory distance” may be healthier for the industry.

However, the market’s immediate reaction is clearly more pessimistic. Bitcoin falling below $90,000, surging trading volumes, and mass liquidations of leveraged long positions all suggest investors are seeing the NSS’s silence as a negative signal. This reaction may be overly pessimistic, but it also reveals the market’s sensitivity to policy uncertainty. When investors are unsure of the government’s true stance, they often choose to sell first and wait.

For Bitcoin price forecasts, the NSS’s ambiguous stance increases uncertainty. If Trump reiterates clear support for crypto in future speeches or policy documents, Bitcoin could rebound quickly. Conversely, continued silence or negative signals could mean deeper corrections. In such an uncertain environment, investors should reduce leverage, diversify positions, and closely monitor subsequent policy statements from the Trump administration.