Bitcoin slid toward $89,000 after the White House published President Donald Trump’s new National Security Strategy, a document that quickly injected uncertainty into global markets.
While the text is not legally binding, its message signaled a major geopolitical shift — and crypto traders reacted immediately.
Key Takeaways
Trump’s security strategy heightened geopolitical uncertainty, pressuring Bitcoin toward $89,000.
Fears of higher global defense spending raised concerns about inflation and delayed rate cuts.
Markets still expect a Fed rate cut next week, cushioning the crypto reaction.
A Strategy That Redefines America’s Global Burden
The new strategy outlines a clear departure from the long-standing expectation that the United States will bear the majority of defense responsibilities for its allies.
The document argues that America’s partners must take on far more regional responsibility, echoing Trump’s comments at the United Nations last year.
This reframing of U.S. global leadership unsettled investors, not because of the policy itself, but because it raises questions about future military spending, government budgets, and inflation — all of which ripple directly into financial markets.
Why Crypto Felt the Impact So Quickly
The sharp market response wasn’t rooted in crypto fundamentals but in the economic consequences implied by the text.
If NATO countries increase their defense spending from 2% to 5% of GDP, many governments would need to borrow heavily to meet those targets. Such a surge in borrowing could push inflation higher, which in turn complicates central banks’ plans for monetary easing.
Crypto assets are particularly sensitive to this dynamic.
Lower interest rates and expanding liquidity have historically supported Bitcoin’s strongest rallies. Any indication that rate cuts could be delayed reduces appetite for risk assets, explaining why Bitcoin’s price reacted almost instantly.
Traders Still Expect the Fed to Ease Policy
Despite the volatility, expectations for next week’s Federal Reserve decision remain firmly tilted toward a rate cut.
Market tools and surveys show strong confidence:
CME FedWatch indicates an 86% chance of a 25-basis-point cut.
A Reuters poll of economists points to similar expectations.
Polymarket traders estimate the odds at 94%.
These outlooks have prevented a deeper sell-off, though the geopolitical shock has temporarily overshadowed the optimistic macro backdrop.
A Market Balancing Fear and Anticipation
Investors now find themselves weighing two competing forces: the potential for monetary easing versus the uncertainty introduced by Washington’s new strategic posture. The combination has revived discussions about whether a prolonged downturn — even a new “crypto winter” — could emerge if geopolitical tensions continue to escalate.
For now, the next major catalyst will be the Federal Reserve’s meeting. Whether policymakers follow through on a rate cut may decide whether Bitcoin regains its footing or faces deeper pressure.
