A new MillTech survey shows U.S. and UK firms are ramping up currency hedges in response to market volatility tied to the ongoing Iran war. The shift, driven by a broad turn toward risk aversion, is already squeezing profit margins. But the survey also underscores something else: crypto is barely in the picture as a hedging tool.
Why firms are hedging more
MillTech polled corporate treasuries on both sides of the Atlantic. The result: a clear uptick in currency hedging activity. Companies are spooked by the war's impact on exchange rates and are locking in rates to protect their bottom lines. It's a classic defensive move — and one that carries its own costs. Hedging isn't free, and those costs are eating into margins, the survey shows.
Crypto's limited role
Despite years of chatter about bitcoin as a macro hedge, the MillTech data tells a different story. Adoption of cryptocurrency for hedging remains limited. Firms aren't treating digital assets as a serious alternative to traditional currency hedges. That might disappoint crypto boosters, but it's consistent with a risk-averse corporate mindset — most treasuries still prefer the familiar mechanics of forwards and options over the volatility and regulatory fog of crypto.
Impact on profit margins
The hedging itself isn't a problem — it's a solution. But the survey flags a real tension: the more firms spend on hedging, the more pressure they put on margins. In a war-driven environment where revenue forecasts are already shaky, that squeeze matters. MillTech didn't quantify the margin hit, but the direction is clear — and it's not great for bottom lines in the near term.
What comes next? The survey is a snapshot, not a forecast. But it suggests that as long as the Iran war keeps currency markets jumpy, treasuries will keep hedging — and will keep skipping crypto as a hedge. That's a reality the industry will have to live with until something changes.
