The Geopolitical Risk of Bitcoin

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The rise of Bitcoin as a strategic reserve is no longer a hypothesis confined to the cryptocurrency market. Publicly traded companies, investment funds, and even governments have begun considering the asset as part of their long-term strategies, driven by its potential for appreciation and the search for alternatives to the traditional financial system. However, recent developments involving Strategy and El Salvador show that turning Bitcoin into a strategic asset brings potential benefits while also introducing risks that extend far beyond price volatility.

The case of Strategy is perhaps the most emblematic example. The company has built its identity around accumulating Bitcoin and has become the world's largest corporate holder of the cryptocurrency. This strategy generated significant gains during bull markets, but it also exposed the company to the effects of market corrections. In the second quarter of 2026, Bitcoin's approximately 14% decline resulted in an accounting loss of around US$8.3 billion. Although this loss does not represent an immediate cash outflow, it changed investors' perceptions, put pressure on the company's stock, and demonstrated how a high concentration in a single asset can amplify both gains and losses.

For companies, this volatility can be managed as part of an investment strategy. For states, however, the calculation is very different. International reserves exist to ensure economic stability during times of crisis by financing essential imports, meeting external debt obligations, defending the national currency, and maintaining market confidence. When a significant portion of those reserves is invested in an asset capable of losing dozens of percentage points within a few months, the government's ability to respond to economic shocks also becomes more uncertain.

El Salvador and Bitcoin

It was precisely this dilemma that led El Salvador to revise its Bitcoin policy. In 2021, the country became the first in the world to recognize the cryptocurrency as legal tender, turning the initiative into an international showcase for President Nayib Bukele's administration. Less than four years later, however, the government revoked that status amid negotiations for a US$1.4 billion loan from the International Monetary Fund (IMF). Although El Salvador continues to hold Bitcoin reserves and the government has reaffirmed its confidence in the asset, the policy change demonstrates that economic decisions are not always driven solely by ideological or technological convictions. In a highly interconnected financial system, access to credit, international credibility, and macroeconomic stability often outweigh the defense of a political project.

The Geopolitical Risk of Bitcoin

The strategic value of a reserve also depends on its acceptance by the leading actors in the international financial system. While gold and the U.S. dollar are widely recognized as globally liquid assets, Bitcoin still operates in a fragmented regulatory environment subject to political and legal changes across different countries. Changes in taxation rules, financial oversight, or market regulations can quickly affect its demand and price.

There is also a less visible, yet equally important, risk: concentration. Economic theory recommends that reserves be diversified precisely to reduce exposure to specific shocks. The greater the dependence on a single asset, the greater the vulnerability to unexpected events. In Strategy's case, the company's performance has become closely tied to Bitcoin's price movements. For a country, a similar concentration would mean linking part of its national economic stability to the behavior of a market known for its high volatility.

This does not mean, however, that Bitcoin should be dismissed as a strategic asset. Its fixed supply of 21 million units remains one of the strongest arguments for those who view it as a long-term hedge against inflation and monetary expansion. Furthermore, its decentralized nature has attracted the interest of governments and investors seeking to reduce their dependence on the financial system dominated by the U.S. dollar. In a context of growing geopolitical fragmentation and competition for economic influence, holding assets that do not depend directly on the decisions of a single central bank may represent a strategic advantage.

This characteristic, however, also highlights the other side of the coin. The same infrastructure that provides greater financial autonomy to individuals and states also makes it more difficult for governments and international institutions to monitor capital flows. North Korea is a striking example of this dynamic. According to recent reports by blockchain intelligence firms, hacking groups linked to the regime were responsible for more than half of the global value stolen in attacks against cryptocurrency platforms during the first half of 2026. The funds obtained through these operations are subsequently laundered through decentralized protocols and converted into Bitcoin, enabling Pyongyang to circumvent part of the restrictions imposed by international sanctions. In other words, the decentralization that makes Bitcoin attractive as an instrument of financial sovereignty also reduces the international system's ability to monitor financial flows, benefiting both governments seeking greater economic independence and isolated regimes attempting to evade traditional mechanisms of financial pressure.

The challenge, therefore, is not simply whether to adopt or reject Bitcoin, but rather to determine what role it should play within a broader strategy. For companies willing to assume higher risks in pursuit of greater returns, significant exposure may be justified, provided it is accompanied by appropriate financial risk management. For states, however, the logic tends to be different. The priority remains preserving liquidity, predictability, and the capacity to respond during times of crisis—objectives that require greater caution when dealing with highly volatile assets.

As Bitcoin matures and its role within the global financial system expands, the debate will likely shift away from questioning its legitimacy and toward determining its ideal proportion within strategic reserves. The experiences of Strategy and El Salvador suggest that the future may lie not in replacing traditional reserve assets, but in diversifying them. In this context, Bitcoin can occupy a meaningful position as a complementary asset, offering appreciation potential and greater portfolio diversification without compromising the financial stability that strategic reserves are intended to provide.