The Trump administration's latest national security strategy has notably excluded any mention of cryptocurrency or blockchain technology, despite the growing integration of these digital assets into the global financial system and President Donald Trump's own stated concerns about international competition in this space.
The document, which outlines the administration's key priorities, released on Friday, instead emphasizes artificial intelligence and quantum computing as the "core, vital national interests" of the United States. The administration stated its objective to "ensure that U.S. technology and U.S. standards—particularly in AI, biotech, and quantum computing—drive the world forward."
This omission of cryptocurrency from the national security strategy stands in contrast to President Trump's previous public statements. In an interview last month, Trump expressed a desire to prevent China from becoming the global leader in cryptocurrency and has previously advocated for all Bitcoin mining operations to be conducted within the United States.
Further highlighting the perceived importance of the sector, the CIA deputy director stated in May that cryptocurrency represents "another area of technological competition where we need to make sure the United States is well-positioned against China and other adversaries."
However, a specific section within the strategy document does touch upon the administration's ambition to preserve and expand "America’s financial sector dominance." It suggests leveraging the country's "leadership in digital finance and innovation" to maintain market liquidity and security, which could be interpreted as an indirect nod to the cryptocurrency industry.
Trump Administration's Pro-Crypto Policies
The Trump administration has demonstrated a supportive stance towards cryptocurrency throughout the year, implementing several promised policies that have encouraged greater adoption of the technology by financial institutions.
Key initiatives have included President Trump signing the stablecoin-regulating GENIUS Act into law, issuing executive orders to establish a crypto task force, and prohibiting the development of a central bank digital currency. Additionally, federal agencies have ceased many cryptocurrency-related enforcement actions under his administration.
The administration has also established a reserve of Bitcoin and a cryptocurrency stockpile composed of forfeited digital assets. Efforts are reportedly underway to explore "budget-neutral" methods for acquiring additional digital assets.
Market Reaction and Economic Factors
Bitcoin traded below $90,000 over the weekend as the market reacted to the national security strategy document. The strategy also called upon U.S. allies to increase their defense contributions significantly.
Specifically, the document urged NATO countries to allocate 5% of their GDP to defense spending, a substantial increase from the current 2%. Such a move would likely lead to heightened government borrowing, potentially driving inflation and complicating efforts by central banks to reduce interest rates.
The upcoming interest rate decision by the Federal Reserve this week is a significant driver of current crypto market sentiment. Many in the market are anticipating an interest rate cut, which historically tends to encourage investors to take on more risk.
Market expectations suggest a potential reduction in interest rates when the Fed convenes on Tuesday and Wednesday. CME's FedWatch tool indicates that approximately 88.5% of market participants are betting on a 25 basis point rate cut.