The Strategic Omission of Crypto in the U.S. National Security Strategy and Its Implications for Investors

The 2025 U.S. National Security Strategy (NSS), released under the Trump administration, has sparked significant debate for its conspicuous absence of any direct mention of cryptocurrency or blockchain technology. Despite the administration's public advocacy for making the U.S. the "crypto capital of the world" and its implementation of pro-crypto policies like the GENIUS Act and the Strategic Bitcoin Reserve, the NSS instead prioritized technological leadership in artificial intelligence (AI), biotechnology, and quantum computing. This omission raises critical questions about the administration's strategic calculus and its implications for investors navigating the evolving crypto landscape.

A Cautious, Infrastructure-Focused Approach

The NSS's silence on crypto reflects a deliberate choice to focus on perceived immediate threats and opportunities in emerging technologies while leaving the regulatory and strategic future of digital assets open-ended. The document's emphasis on "U.S. technology and standards" in AI, biotech, and quantum computing suggests a prioritization of sectors deemed critical to national security and global competitiveness. By omitting crypto, the administration may be signaling a preference for a cautious, infrastructure-focused approach-one that avoids premature entanglement in the regulatory complexities of digital assets while still fostering innovation through parallel policy channels.

This duality is evident in the administration's concurrent actions. For instance, the Treasury's establishment of a Strategic Bitcoin Reserve and the SEC's creation of a "Crypto Task Force" demonstrate a commitment to integrating digital assets into the U.S. financial framework. These moves align with the broader goal of positioning the U.S. as a leader in crypto innovation, even as the NSS refrains from explicitly endorsing it as a national security priority.

Regulatory Clarity and Institutional Adoption

Post-NSS regulatory developments have further clarified the administration's stance. The SEC's rescission of SAB 121 and approval of generic listing standards for crypto ETPs have reduced barriers for institutional participation, enabling traditional financial institutions to custody and trade digital assets more freely. Similarly, the Senate Agriculture Committee's bipartisan market structure draft-placing Bitcoin and Ether under the CFTC's jurisdiction-has provided legal certainty for institutional fiduciaries. These actions suggest a regulatory environment increasingly favorable to crypto, even as the NSS remains silent.

Institutional adoption has accelerated in response. By early 2025, over 59% of institutional investors had allocated at least 10% of their assets to digital assets, with BlackRock's iShares Bitcoin Trust (IBIT) amassing $18 billion in assets under management. This shift reflects a growing recognition of crypto as infrastructure rather than speculation, with stablecoins facilitating $46 trillion in annual transactions and tokenized real-world assets gaining traction.

Investor Sentiment and Market Dynamics

The omission of crypto in the NSS has not dampened investor enthusiasm. Retail sentiment in North America remains bullish, with 80% of U.S. retail investors planning to increase exposure to digital assets. Institutional confidence, meanwhile, is driven by regulatory clarity and macroeconomic tailwinds. A Sygnum Bank survey found that 61% of investors plan to boost digital asset allocations in Q4 2025, with 70% expressing interest in staking opportunities.

However, challenges persist. The lack of execution frameworks for institutional trading-such as market impact models-has led to inefficiencies, deterring some capital inflows. Additionally, the concentration of institutional capital in Bitcoin and Ether, rather than a diversified portfolio of blockchain assets, highlights the sector's immaturity.

Implications for Future Policy and Investment

The NSS's omission of crypto may signal a strategic preference for a measured, infrastructure-driven approach to digital assets. By avoiding explicit endorsement, the administration leaves room for regulatory experimentation and market-driven innovation. This could lead to a bifurcated policy landscape: one where crypto thrives as a financial asset under the CFTC and SEC, while its strategic role in national security remains undefined.

For investors, this ambiguity presents both opportunities and risks. The regulatory clarity post-NSS has spurred institutional adoption, but the absence of a cohesive national strategy could delay broader acceptance. Investors should monitor legislative efforts like the STABLE Act and the consolidation of market structure bills, which could further solidify the U.S. as a crypto innovation hub.

Conclusion

The 2025 NSS's omission of cryptocurrency underscores a nuanced, infrastructure-focused approach to digital assets-one that prioritizes regulatory clarity and market-driven adoption over explicit national security mandates. While this silence may reflect caution, the administration's parallel actions suggest a commitment to fostering crypto innovation. For investors, the path forward lies in navigating this duality: leveraging regulatory tailwinds while remaining mindful of the sector's evolving strategic role in the U.S. financial and technological ecosystem.