Bitwise Chief Investment Officer Matt Hougan says Bitcoin’s strong performance during the Iran conflict is revealing a deeper shift in how the market may be starting to value the asset.
In a new memo titled Why Bitcoin Rallies on Geopolitical Uncertainty, Hougan argued that Bitcoin is not only behaving like digital gold, but is increasingly being repriced as a neutral monetary asset that could gain relevance in cross border settlement during periods of geopolitical stress. The memo says Bitcoin rose 12% between the February 27 market close and April 10, while the S&P 500 fell 1% and gold dropped 10%.
Hougan’s core argument is that buying Bitcoin now involves two overlapping bets. The first is the familiar digital gold thesis, or the idea that Bitcoin can take share from gold in the global store of value market.
The second is more speculative: that Bitcoin could someday function as a politically neutral settlement asset in a world where traditional dollar based rails are becoming less universal. He compares that second possibility to an out of the money call option whose value rises as the odds of eventual adoption increase and as the global monetary order grows more volatile.
The memo grounds that thesis in the post 2022 shift in global payments. After Russia’s invasion of Ukraine, major Russian banks were cut off from Swift, which Hougan argues accelerated the development of alternative settlement routes, especially between Russia and China.
In the memo, he says yuan settlement accounted for less than 2% of Russia’s trade before the war and rose to nearly 40% by early 2024, while Russia and China now conduct more than 99% of bilateral trade in rubles and yuan.
Hougan cites a Financial Times report saying a spokesperson for Iran’s oil export sector said ships passing through the Strait of Hormuz would face a $1 per barrel toll collected in Bitcoin, a move that would further support his argument that geopolitical fractures are creating new openings for Bitcoin to be used in cross border settlement.
Hougan is not arguing that Bitcoin has already become a major global settlement currency. He is arguing that geopolitical fragmentation is making that scenario less far fetched than it once seemed, and that markets may be starting to price in that possibility.
In his view, conflict raises the value of Bitcoin’s optionality because it both increases stress on the current monetary system and creates new incentives to route value through assets that sit outside any single government’s control.
The takeaway for investors is straightforward. Hougan says Bitcoin may increasingly act as a hedge against geopolitical disorder, not because war is inherently bullish for risk assets, but because a more fragmented global order increases the appeal of neutral and portable money.
He also argues that if Bitcoin evolves into both a store of value and a settlement asset, long term valuation models may prove too conservative, making a $1 million Bitcoin less far fetched.
