Coinpaper
January 5, 2026 5:37 PM UTC

Pentagon Bitcoin Claim Puts Military Focus on Crypto Power

Defense Secretary Pete Hegseth told lawmakers that the Pentagon has classified work tied to Bitcoin and crypto, after Rep. Lance Gooden asked whether the United States was using Bitcoin to gain strategic leverage against China. The exchange came during a House Armed Services Committee hearing, where Gooden framed Bitcoin as a national security issue rather than only a financial asset. Hegseth said he has long supported Bitcoin and crypto’s potential, then said some Defense Department efforts around “enabling it or defeating it” remain classified. Hegseth did not give operational details. However, his answer showed that senior defense officials now discuss Bitcoin in military terms, including leverage, cybersecurity, and competition with China. The public record does not confirm the full scope of the classified work. U.S. Military Runs Bitcoin Node, Paparo Says The comments followed earlier testimony from Adm. Samuel Paparo, head of U.S. Indo-Pacific Command. Paparo told Gooden that the command has a Bitcoin node and uses it for network security work, not for mining or financial trading. Gooden’s office said Paparo described Bitcoin as a computer science tool linked to cryptography, proof of work, and network protection. The command is using the node to monitor the Bitcoin network and run operational tests tied to cybersecurity. Gooden also cited Bitcoin Policy Institute estimates that China holds about 194,000 BTC, while the United States holds about 328,000 BTC. Those figures remain estimates, but they support Gooden’s argument that Bitcoin has moved into national security debates. Bitcoin Enters U.S. Security Debate Gooden said Bitcoin has changed from a “fringe asset” into a matter of national security. He pointed to several risks, including reported crypto demands around the Strait of Hormuz, North Korea-linked cybercrime, and China’s possible Bitcoin holdings. The claims around adversary use need careful wording. Public sources support concerns about North Korea-linked crypto theft and Iran-related crypto payment risks, but the Pentagon has not publicly confirmed every detail in the TFTC post. The confirmed news is narrower and stronger. Hegseth acknowledged classified Pentagon work involving Bitcoin-related capabilities, while Paparo confirmed a U.S. military Bitcoin node. Together, the remarks show that Bitcoin now sits inside defense and geopolitical discussions, not only finance committee debates.