Bitcoin Could Be Taiwan’s Best Weapon Against Chinese Blockade, Research Suggests

A Bitcoin Policy Institute report urged Taiwan to build a national Bitcoin (BTC) reserve as a wartime safeguard against a potential Chinese military blockade, arguing the asset's borderless nature and recent outperformance of gold during the U.S.-Iran conflict strengthen the case for sovereign adoption.

Taiwan's Seized BTC Holdings

BPI research fellow Jacob Langenkamp published the report on Tuesday. He argued that Taiwan's existing stash of 210 Bitcoin — seized from criminals and worth roughly $14M — should serve as the foundation for a strategic reserve.

The logic centers on a worst-case scenario. If China blockades or invades the island, gold cannot be physically moved and dollar reserves can be frozen. Bitcoin requires no transport and remains accessible regardless of ground conditions.

Taiwan's central bank reviewed the idea in December and rejected it. Officials cited volatility, custody risks and thin liquidity as disqualifying factors, pointing to the U.S. dollar as the more practical option. Langenkamp acknowledged those concerns but said proper institutional custody and risk management can address them.

Also Read: Bitcoin Goes Below $67K After Trump Vows To Bomb Iran To 'Stone Ages'

Langenkamp's Dollar Warning

The report flagged Taiwan's heavy exposure to the greenback. At least 80% of the central bank's reserves sit in dollar-denominated assets, and most trade flows run through the same currency.

Langenkamp listed several pressures that could erode dollar value over time: rising U.S. government debt, Federal Reserve monetary expansion, a possible downturn in AI-sector valuations and shrinking semiconductor revenues. He argued Bitcoin could pair with gold to hedge against those risks before other nations make the same move.

Taiwan's central bank did not fully shut the door after December. Officials said the bank would continue testing digital asset technology through a sandbox program using crypto the country already holds.

BTC's Wartime Track Record

The case for Bitcoin as a crisis asset gained real-world evidence during the U.S.-Iran conflict that began Feb. 28. In the weeks following the outbreak of hostilities, BTC rose roughly 7% while gold fell about 2% and the Nasdaq 100 slipped 0.5%.

BitMEX co-founder Arthur Hayes noted the divergence, writing that Bitcoin was "starting to look a lot like digital gold." Bernstein analyst Gautam Chhugani called the crypto market "resilient in the face of the Middle East conflict."

That performance underscores the argument Langenkamp made for Taiwan.