A powerful examination of how geopolitical tension, strategic reserve ambitions and rising financial volatility are pushing bitcoin into a new era of protocol warfare. A BBC-style deep dive into the risks nations may pose to the world’s largest cryptocurrency.
A Digital Currency at a Dangerous Crossroads
Bitcoin’s recent market shock has rekindled a profound debate about its long-term resilience, exposing vulnerabilities that go far beyond price fluctuations. As the cryptocurrency briefly plunged below $90,000—erasing more than a quarter of its 2025 gains—the world was reminded that bitcoin remains the most unpredictable asset in the global financial landscape. Yet behind the volatility lies a more consequential shift: nation-states are entering the crypto arena, and their involvement is poised to reshape the future of digital money.
Bitcoin’s Volatile Week Sparks Wider Alarm
The dramatic fall, fuelled by a global retreat from risk assets and uncertainty surrounding US interest-rate policy, exposed once again bitcoin’s reputation as the “wildest horse in the financial paddock.” Long-term holders taking profits and thinning order books after October’s flash crash added to the turbulence. But despite the familiar financial drivers, the conversations unfolding among industry leaders suggest a growing geopolitical dimension no longer possible to ignore.
Strategic Reserves and a Shifting Global Mood
At Crypto Fest, analysts and policymakers engaged in sober reflection about the risks of elevating bitcoin to the level of traditional strategic reserves. South Africa’s Reserve Bank governor, Lesetja Kganyago, reiterated his stance that bitcoin lacks the foundational characteristics that define essential economic inputs such as gold or oil. He reminded audiences that an economy cannot function on “vibes and volatility.”
But observers also noted that attitudes worldwide are beginning to shift. As governments evaluate bitcoin’s role in future financial systems, its position at the intersection of politics and power is becoming increasingly pronounced.
The Threat of Nation-State Protocol Warfare
A striking theme emerged from expert panel discussions: should countries adopt bitcoin as a strategic reserve, the delicate balance that has safeguarded the network could quickly unravel. Until now, miners, exchanges and long-term holders have acted as rational economic participants, united by the shared incentive to preserve the stability of the protocol.
Nation-states operate by different rules.
As speakers warned, governments are not guided solely by economic incentives but by geopolitics—and they command far greater resources. “Countries aren’t bound by profit motives. They’re bound by politics, power and the occasional need to ruin an adversary’s day.” With the capacity to deploy “infinite budgets,” states could theoretically attempt to disrupt the bitcoin protocol itself. The article notes that “a 51% attack costs about $20-million a day,” raising concerns about what could happen if bitcoin became a tool of geopolitical confrontation.
Routing attacks, blockchain-level censorship or forced protocol forks—capable of freezing or erasing assets—were highlighted as tangible risks. These possibilities challenge 15 years of assumptions about bitcoin’s security.
A Global Power Struggle Moves Into the Blockchain
For South Africans intrigued by the crypto market, analysts advised caution. The volatility seen in recent weeks may be trivial compared with the turmoil that could emerge if major world powers begin targeting the blockchain as part of broader strategic rivalry.
This backdrop casts South Africa’s measured approach in a new light. The nation “regulate[s] crypto,” taxes it, and permits trading—but resists elevating bitcoin to the status of gold. That distance, experts argued, may become increasingly valuable as bitcoin enters a geopolitical era shaped not by traders, but by governments.
