• Bitwise's Matt Hougan said Bitcoin has surged 12% since the Iran conflict began, while the S&P 500 and Gold dropped 1% and 10%, respectively.
• He noted that declining dollar dominance positions BTC as an "out-of-the-money call option" for international settlements.
• Hougan said the $1 million BTC price projection could serve as a starting point if Bitcoin continues to evolve as both a store of value and a currency.

Bitwise Chief Investment Officer (CIO) Matt Hougan said Bitcoin's recent strength amid escalating geopolitical tensions reflects a deeper shift in global finance.

In a memo released late Monday, Hougan argued that Bitcoin's performance during the ongoing Iran conflict highlights its evolving role in a fragmented monetary system.

Since the US-Israel war against Iran began in late February, Bitcoin has gained roughly 12%, while the S&P 500 and Gold fell 1% and 10%, respectively, over the same period. The divergence has challenged the conventional view of Bitcoin as a risk asset expected to weaken during geopolitical instability.

BTC vs Gold, Stocks. Source: Bitwise

Hougan, alongside Bitwise Head of Research Ryan Rasmussen, rejected two commonly cited explanations for Bitcoin's resilience.

"Some argue that geopolitics is irrelevant for bitcoin, while others point out that war often leads to money printing, which tends to boost bitcoin in the long term, [..] both arguments are wrong," Hougan wrote.

He stated that his long-term prediction for Bitcoin to hit $1 million could "look like a starting point" if BTC becomes a global currency and store of value.

Matt Hougan positions Bitcoin as dual bet on digital Gold and global currency

Hougan described Bitcoin as representing two distinct investment theses. The first is its emergence as digital Gold, competing for a share of the estimated $38 trillion global store-of-value market.

The second thesis involves Bitcoin as a neutral, borderless settlement asset. Hougan characterized this as an "out-of-the-money call option" that gains value as the likelihood of widespread adoption increases.

He argued that the possibility has risen meaningfully in recent years, particularly following Russia's invasion of Ukraine in 2022. In response to the invasion, the US and its allies removed major Russian banks from the SWIFT system. Hougan noted that, rather than isolating Russia, the move accelerated de-dollarization trends.

"Countries grew reluctant to deal in dollars for political reasons," Hougan said, arguing that such moves create demand for politically neutral alternatives like Bitcoin.

Hougan pointed to recent developments in the Middle East as further evidence of this shift. Iran's oil agency reportedly announced last week plans to collect a $1-per-barrel transit fee, estimated at roughly $20 million per day, from ships passing through the Strait of Hormuz, payable in Bitcoin.

According to Hougan, the broader takeaway is that geopolitical conflict itself is increasing Bitcoin's strategic relevance. As tensions disrupt traditional financial systems, the probability that Bitcoin will be used for neutral cross-border settlement rises.

Bitcoin has continued its recovery, briefly breaking above $75,000 before slightly easing to $74,700 at the time of writing.