Trump's National Security Strategy Gives Reality Check to Crypto's Low Interest Rate Obsession

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Trump's National Security Strategy Gives Reality Check to Crypto's Low Interest Rate Obsession The White House's new National Security Strategy emphasizes increased global fiscal expansion and military spending. By Omkar Godbole , AI Boost | Edited by Oliver Knight Updated Dec 5, 2025, 5:26 p.m. Published Dec 5, 2025, 5:25 p.m. What to know : The White House's new National Security Strategy emphasizes increased global fiscal expansion and military spending. NATO allies are urged to raise defense spending to 5% of GDP, significantly higher than the previous 2% mandate. Heightened government borrowing could lead to higher bond yields and inflation, complicating interest rate cuts. The White House's freshly unveiled National Security Strategy reads less like a traditional diplomatic blueprint and more like a call for global fiscal expansion. For the crypto market, addicted to the idea of rapid-fire interest rate reductions in the U.S. and worldwide, this seems to be a cold shower nobody ordered. The core of the strategy, signed by President Donald Trump, explicitly champions an "America First" agenda backed by significant economic and military reorientation both at home and abroad. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . Consider the directives: the strategy mandates that NATO allies raise defense spending to 5% of GDP, a hefty increase from its long-standing mandate of 2%. Japan and South Korea are also expected to spend more. "Given President Trump’s insistence on increased burden-sharing from Japan and South Korea, we must urge these countries to increase defense spending, with a focus on the capabilities—including new capabilities—necessary to deter adversaries and protect the First Island Chain ," the strategy says. It adds further, "We will also harden and strengthen our military presence in the Western Pacific, while in our dealings with Taiwan and Australia we maintain our determined rhetoric on increased defense spending." The document explicitly calls on U.S. allies to spend far more of their national gross domestic product on their own defense, and on greater American military investment in the Indo-Pacific to strengthen vigilance in that region. Funding this kind of monumental expenditure inevitably means more government borrowing or bond supply worldwide, which would drive up bond yields, the cost of capital, and inflation, making it harder for central banks to cut rates. In fact, rate cuts may have little impact as increasing bond supply will likely keep yields elevated. Moreover, increased borrowing by many of the already heavily indebted advanced nations could raise fiscal crisis risks. If that's not enough, the strategy explicitly states that the "era of mass migration is over." It means that the U.S. may not import cheap labour at a pace seen in earlier years, which could make wages sticky, adding to inflation. All this looks like a bullish tailwind for assets seen as inflation hedges and safe havens, such as gold. Bitcoin BTC $ 88,817.07 is also pitched as “digital gold” by its proponents but has failed to live up to the hype this year. Gold has surged 60% this year despite the U.S. 10-year yield staying stubbornly above 4%, while BTC is now down nearly 5% on a year-to-date basis. Only time will tell if it evolves into digital gold in a world increasingly fiscally emboldened. The Fed is expected to cut rates by 25 basis points next week, pushing the benchmark rate down to 3.5%. But with the security strategy calling for global expansion, the odds of steep rate cuts appear bleak. Bitcoin News Donald Trump Interest Rates AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You Hedera Drops Alongside Broader Crypto Market Amid Volume Spike By CD Analytics , Oliver Knight 20 minutes ago Hedera's token retreats despite fresh institutional product speculation driving broader altcoin momentum. What to know : HBAR dropped from $0.1391 to $0.1360, breaking key $0.1380 support level. Trading volume spiked 47% above average during the technical breakdown. New ETF applications surface for HBAR alongside LTC and DOGE tokens. 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