Matt Hougan, Chief Investment Officer at Bitwise Asset Management, said
Since the conflict in the Middle East began, the price of bitcoin has risen 12%, while the S&P 500 and gold have fallen 1% and 10%, respectively, forklog.com writes.
The dynamics contradict the thesis that with geopolitical shocks the first cryptocurrency behaves as a high-risk asset. However, experts called this view erroneous.
“Chaos is a ladder,” they wrote.
Bitcoin’s rally is a consequence of conflict, they said: cracks in the global financial system increase the appeal of non-sovereign money.
Two bets in one
Hougan and Rasmussen described the first cryptocurrency as “two bets in one.” The first is the familiar one: competition with gold for the status of a savings vehicle. The second – a settlement currency in international trade – once seemed unlikely, but is now rapidly gaining momentum.
Experts attributed the shift to the fact that financial infrastructure has become a weapon. After Russia’s disconnection from SWIFT in 2022, trade is increasingly going through alternative systems, especially Chinese ones.
As a result, the dollar is gradually losing ground on the periphery and creating a niche for non-dollar payment systems.
Recent events have only strengthened this trend, experts noted. Reports of Iran’s readiness to accept bitcoin as payment for oil transit signal a desire to bypass traditional systems – at least on an experimental basis.
Bitwise acknowledged that sanctions are still in place and the transparency of blockchain limits illegal use. But the broader signal is more important: geopolitical fragmentation is pushing countries to seek apolitical alternatives.
$1 million as a starting point
Experts believe that the changes have a direct impact on bitcoin’s valuation. They compared the cryptocurrency’s currency scenario to an out-of-the-money call option: its price rises with the probability of adoption and global volatility.
“The probability part is simple: an option to buy a stock at $120 goes up in price when the stock goes from $100 to $110. With volatility it is more complicated, but the principle is the same: if a $100 stock becomes twice as volatile, the probability of reaching $120 increases – simply because of the larger swings,” explained Hougan and Rasmussen.
Both conditions are met: the conflict has undermined the global monetary order while bringing bitcoin closer to being a real means of settlement.
The role of digital gold is changing: Bitwise expects bitcoin to become a hedge against geopolitical chaos, not just a speculative asset dependent on liquidity.
This changes long-term expectations as well. If the asset establishes itself as a means of saving and as a unit of account, current price targets may be undervalued. Experts now accept the $1 million rate as a baseline rather than a ceiling.
At the time of writing, the first cryptocurrency is trading around $75,200 – the highest since early February. Over the past 24 hours, quotes of the coin jumped by 4.5%.
