Bitwise: Iran Conflict Is Pushing Bitcoin Toward a Real Settlement Asset Role

Bitcoin Outperforms Gold and S&P 500 Amid Middle East Crisis

Bitwise Chief Investment Officer Matt Hougan and Head of Research Ryan Rasmussen have argued that Bitcoin's resilience during the Iran conflict does not contradict the risk-off regime — it is a direct product of it. Geopolitical chaos, in their view, amplifies demand for apolitical money.

«Bitcoin is apolitical money. When nations fight, the incentive to use apolitical money goes up. Since the Iran conflict began in late February: — Bitcoin: +12% — S&P 500: -1% — Gold: -10%. Expect bitcoin increasingly to act as a hedge against geopolitical chaos.» — Bitwise (@Bitwise), original post

Since the Middle East escalation began, Bitcoin has gained 12%, while the S&P 500 declined 1% and gold dropped 10%. This performance directly challenges the widely held view that Bitcoin behaves purely as a risk-on asset during geopolitical shocks.

Why This Matters

For years, analysts have debated whether Bitcoin is a speculative vehicle or a safe haven. Data from recent months suggests a paradigm shift. If BTC can genuinely serve as a hedge against geopolitical instability, its investment profile changes fundamentally — potentially attracting institutional capital from investors seeking diversification beyond traditional refuges like gold and treasuries.

A Dual Bet: Store of Value and Medium of Exchange

Hougan and Rasmussen described Bitcoin as "two bets in one." The first is well established: competing with gold for store-of-value status. The second — serving as a settlement currency in international trade — once seemed improbable but is now rapidly gaining traction.

The catalyst, according to the analysts, is the weaponization of financial infrastructure. After Russia was cut off from SWIFT in 2022, trade has increasingly moved through alternative systems, particularly Chinese ones. The dollar is gradually losing ground on the periphery, creating space for non-dollar payment rails.

Recent developments have accelerated this trend. Reports of Iran's willingness to accept Bitcoin as payment for oil transit — even on an experimental basis — signal a desire to bypass traditional settlement channels. Bitwise acknowledged that sanctions remain in effect and blockchain transparency limits illicit use. Yet the broader signal matters more: geopolitical fragmentation is pushing nations toward apolitical alternatives.

Why $1 Million Is Now the Baseline

The Bitwise analysts compared Bitcoin's currency use case to an out-of-the-money call option. Its value increases under two conditions: rising probability of adoption and increasing global volatility.

Hougan and Rasmussen illustrated the concept with a straightforward example: an option to buy a stock at $120 becomes more valuable when the stock rises from $100 to $110. Similarly, if a $100 stock becomes twice as volatile, the probability of reaching $120 increases — simply due to wider price swings.

Both conditions are currently met, the analysts noted. The conflict has disrupted the global monetary order while simultaneously bringing Bitcoin closer to real-world settlement use. If the asset establishes itself as both a store of value and a unit of account, current price targets may prove too conservative. Bitwise now views $1 million as a baseline level rather than a ceiling.

Current Market Snapshot

At the time of writing, Bitcoin is trading near $75,200 — its highest level since early February. The price has surged 4.5% over the past 24 hours. Macro analyst Jordi Visser previously identified $76,000 as the key level for confirming a sustained bullish trend.