Bitwise Chief Investment Officer Matt Hougan said on April 14 that Bitcoin’s rally during the recent Iran conflict demonstrates its expanding role beyond a simple inflation hedge, reflecting both its position as a safe-haven asset and its potential as a neutral global settlement layer.
"The first is the familiar digital gold thesis," Hougan wrote in a memo titled Why Bitcoin Rallies on Geopolitical Uncertainty. "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."
Hougan’s argument rests on two overlapping bets. The "digital gold" thesis is supported by Bitcoin's performance, which rose 12% between February 27 and April 10, while the S&P 500 fell 1% and gold dropped 10%, according to the memo. The second, more speculative thesis, is that geopolitical fragmentation is increasing the probability of Bitcoin being used for cross-border settlement outside the traditional US-dollar system. Hougan points to the post-2022 shift where Russia, cut off from Swift, dramatically increased its use of the yuan for trade settlement with China to nearly 40% of its total trade.
This scenario gained further credibility from reports that Iran’s oil export sector was considering a $1 per barrel toll collected in Bitcoin for ships passing through the Strait of Hormuz. While not yet a major settlement currency, Hougan argues that such events make the long-term case for a non-sovereign settlement asset more plausible, increasing the value of what he calls an "out-of-the-money call option" on Bitcoin's future use. For investors, this suggests Bitcoin may act as a unique hedge against geopolitical disorder, with Hougan noting that if this dual role materializes, long-term valuation models may prove too conservative, making a "$1 million Bitcoin less far-fetched."
This article is for informational purposes only and does not constitute investment advice.
