Bitcoin is beginning to show a role beyond its long-standing digital gold narrative as geopolitical tensions reshape global finance, according to Bitwise Chief Investment Officer Matt Hougan. In a recent memo, Hougan said Bitcoin’s price action during the US-Iran war points to a broader shift in how the asset is being valued by the market. He said the latest rally reflects growing interest in Bitcoin not only as a store of value but also as a neutral asset for cross-border settlement. Bitwise said Bitcoin gained about 12% from late February through early April, a period marked by military tension involving the United States, Israel, and Iran. Over the same stretch, the S&P 500 fell 1% and gold dropped 10%, based on the figures cited in the firm’s note. That performance stood out because Bitcoin has often been treated as a high-risk asset that tends to weaken during periods of geopolitical stress. Bitcoin Outperforms Stocks and Gold Hougan said the latest move challenged two common explanations often used to describe Bitcoin during global unrest. One view holds that geopolitical events have little direct effect on Bitcoin. Another argues that conflict can support Bitcoin only through future monetary expansion and inflation. Hougan rejected both ideas and said Bitcoin’s recent strength is tied more directly to fractures in the global financial system. Source: Bitwise Bitwise presented Bitcoin as two investment themes at once. One is the well-known case for Bitcoin as digital gold, competing for a share of the global store-of-value market. The other is its potential role as a politically neutral settlement asset in international trade. Hougan described that second case as an “out-of-the-money call option,” meaning it could gain value as the chances of real-world adoption increase. Bitwise Links Rally to Global Payment Shifts The firm tied that view to changes that followed Russia’s invasion of Ukraine in 2022. After major Russian banks were removed from the SWIFT network, countries and trade partners increased efforts to reduce dependence on dollar-based settlement systems. Hougan said that shift encouraged interest in alternative rails, including local currencies and digital assets that are not controlled by any single government. Bitwise also pointed to recent reports from the Middle East. Hougan cited a report that Iran’s oil export sector was considering the use of Bitcoin for transit-related payments linked to the Strait of Hormuz. While no broad adoption has been confirmed, the firm said such reports show that countries facing pressure within the traditional financial system may be more willing to consider neutral alternatives for certain transactions. Hougan said this does not mean Bitcoin has already become a global settlement currency. Instead, he said the market may be gradually assigning more value to that possibility. In Bitwise’s framework, the chance that Bitcoin could serve as both a store of value and a settlement tool increases its long-term valuation case. $1 Million Target Framed as Long-Term Scenario Based on that thesis, Hougan said Bitcoin’s previously discussed $1 million price projection could prove conservative if both parts of the adoption case continue to develop. He said the estimate could become a starting point rather than a ceiling if Bitcoin gains wider acceptance in savings, reserves, and cross-border transfers. Bitcoin was trading near $74,700 after briefly moving above $75,000 at the time referenced in the reports. Bitwise said the recent advance suggests the asset may be responding to geopolitical fragmentation in a different way than many traditional markets. The firm’s position is that Bitcoin is no longer being valued only as digital gold, but also as a neutral monetary network that may attract more attention as global payment systems become more divided.
