BREAKING: U.S. Burns Through Nearly Half of Government’s $23B Bitcoin Reserve in First Week of Iran War

The United States has expended nearly half of its strategic Bitcoin reserve—valued at over $11.3 billion—in just the first week of military engagement with Iran, raising alarms over the sustainability of digital asset warfare financing. At the current burn rate of approximately $1.88 billion daily, the entire 328,372 BTC treasury would be depleted within 12 days, potentially triggering a 10%+ correction across crypto markets as government liquidation pressure mounts. White House officials confirm the $11.3 billion expenditure doesn't cover total war costs, with congressional sources indicating an imminent emergency funding request as estimates soar toward $50 billion.

Crypto holds steady as stock markets struggle

Despite the chaos in global markets, cryptocurrencies have held up better than stocks and bonds this month. Bitcoin has climbed nearly 8% since the first US strikes on Iran in late February, even as equity markets struggle under the weight of high oil prices. The digital currency appears to be finding a floor near $72,000.

Analysts point to one key reason for crypto’s relative strength: people in the Middle East are worried about losing access to their banks.

Stephen Coltman, head of macro at 21Shares, explained that residents of cities like Dubai and Abu Dhabi, who are suddenly facing the possibility of a regional war, are looking for a safe place to put their money quickly.

Stock exchanges in both cities briefly shut down at the start of the conflict, while Bitcoin kept trading around the clock.

“If you’re somebody in Dubai or Abu Dhabi and suddenly worried about losing access to the banking system and needing to leave quickly, bitcoin may appear to be an attractive place to put your assets,” Coltman said.

War spending could push Bitcoin higher, analysts say

In the long run, some analysts believe that the war expenditures themselves might raise Bitcoin.

According to Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, excessive military spending would compel the Federal Reserve to lower interest rates and inject money into the financial system in order to fund the war effort.

When interest rates drop, investors tend to take on riskier bets, and Bitcoin has historically benefited from such circumstances. According to Hayes, this tendency has often happened in past US military conflicts.

Analysts at the London Crypto Club, David Brickell and Chris Mills, say Bitcoin wins either way the war goes. A long, drawn-out conflict would push scared investors into Bitcoin as a safe haven. A quick end to the fighting, they argue, would trigger a wave of buying as confidence returns.

James Butterfill, head of research at CoinShares, added that if trust in global financial systems continues to erode, assets like Bitcoin that are scarce and not controlled by any government stand to gain over the medium term.

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