The first week of America’s war with Iran already cost taxpayers more than $11 billion, about half the total value of the government’s Bitcoin holdings, according to figures provided to Congress behind closed doors.

To put that in context, the US government has 328,372 Bitcoins, worth around $23.13 billion, as of March 13. This indicates that the combat has already used up around half of that total, or 48.9%.

At that rate, the entire Bitcoin reserve, roughly $1.88 billion every day, would be exhausted in just over 12 days.

The $11.3 billion amount does not fully cover the cost of the war, officials quickly pointed out. More information regarding the war has been demanded by lawmakers, and according to a number of congressional officials, the White House is expected to request additional funding from Congress shortly.

A $50 billion estimate has been put forward by some officials, but others claim even that might not be sufficient.

Built through seized assets and established by executive order, the government’s Bitcoin stockpile is intended to be kept indefinitely and not sold, even during times of conflict.

Democratic lawmakers have demanded that administration officials testify in public about the potential duration of the conflict and what will happen to Iran if hostilities end.

Joint US and Israeli airstrikes on February 28 marked the start of the conflict. Since then, the battle has spilled into Lebanon. The Strait of Hormuz has been effectively blocked by Iran’s military retaliation. Oil prices skyrocketed as a result of the closure, with Brent crude momentarily reaching $119.50 per barrel.

According to Jake Ostroviskis, head of OTC trading at Wintermute, “the oil move matters more for cryptocurrency than the geopolitics itself.”

“If Brent stays above $80 for more than a few sessions, the re-inflation narrative hardens.”

Crypto holds steady as stock markets struggle

Despite the chaos in global markets, cryptocurrencies have held up better than stocks and bonds this month. Bitcoin has climbed nearly 8% since the first US strikes on Iran in late February, even as equity markets struggle under the weight of high oil prices. The digital currency appears to be finding a floor near $72,000.

Analysts point to one key reason for crypto’s relative strength: people in the Middle East are worried about losing access to their banks.

Stephen Coltman, head of macro at 21Shares, explained that residents of cities like Dubai and Abu Dhabi, who are suddenly facing the possibility of a regional war, are looking for a safe place to put their money quickly.

Stock exchanges in both cities briefly shut down at the start of the conflict, while Bitcoin kept trading around the clock.

“If you’re somebody in Dubai or Abu Dhabi and suddenly worried about losing access to the banking system and needing to leave quickly, bitcoin may appear to be an attractive place to put your assets,” Coltman said.

War spending could push Bitcoin higher, analysts say

In the long run, some analysts believe that the war expenditures themselves might raise Bitcoin.

According to Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, excessive military spending would compel the Federal Reserve to lower interest rates and inject money into the financial system in order to fund the war effort.

When interest rates drop, investors tend to take on riskier bets, and Bitcoin has historically benefited from such circumstances. According to Hayes, this tendency has often happened in past US military conflicts.

Analysts at the London Crypto Club, David Brickell and Chris Mills, say Bitcoin wins either way the war goes. A long, drawn-out conflict would push scared investors into Bitcoin as a safe haven. A quick end to the fighting, they argue, would trigger a wave of buying as confidence returns.

James Butterfill, head of research at CoinShares, added that if trust in global financial systems continues to erode, assets like Bitcoin that are scarce and not controlled by any government stand to gain over the medium term.

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