Bitcoin and Deterrence, some thoughts: A key contributor of U.S. strategic deterrence (say vis-a-vis China) is our fiscal and monetary capacity to finance a conflict. Leaving aside the atrophy of our defense industrial base, the growing strain on our national balance sheet and lurking fragility in our debt market is a source of strategic vulnerability. You cant deter a war that you cant credibly finance. A geopolitical crisis heading towards war would likely see a buyers strike for USTs (and massive issues w/ dealer intermediation capacity and PTFs fleeing the market), forcing the Fed to cap yields with unlimited QE and related emergency 13(3) liquidity/repo facilitiesBitcoin (and gold) would rapidly respond. While it may be unorthodox, putting Bitcoin on the national balance sheet may reinforce strategic deterrence, given that Bitcoin typically responds positively to geopolitical shockscreating a positive, not negative, reflexivity that bolsters national resilience. We have evidence for this from both the regional bank failures and Russia sanctions events. Officials are presently attempting to shore up the Treasury market with moves to regulate PTFs as dealers and push towards Central Clearing (while also quietly preparing to end QT)but these will not be sufficient to contain contagion if war (or even the threat of war) breaks out. Further, China has demonstrated a clear intent and capability to degrade or destroy U.S. critical infrastructure via cyber attacks in a crisis or conflict (see the PLAs Volt Typhoon)our financial infrastructure would be a prime target in such a crisis, further amplifying the strategic effect on our national capacity and political will to engage or escalate in a conflict. Our cyber and fiscal fragilities are thus a source of strategic vulnerability. Strategic vulnerability makes the decision calculus by a challenger more favorableand thus makes a conflict more likely. To the extent that a Strategic Bitcoin Reserve might mitigate such strategic vulnerabilities, it would increase our resilience and thus the credibility of deterrence. Peace through strength. https://t.co/Z73K9VcLGp https://t.co/DLc2MWiLUj https://t.co/oDnUJYnnLa.