Bitcoin's recent performance has shattered conventional market narratives. In a client memo published Tuesday, Bitwise CIO Matt Hougan and Head of Research Ryan Rasmussen declared that “chaos is a ladder.” Since the U.S.-led airstrikes began on February 28, Bitcoin has surged 12%, while the S&P 500 dropped 1% and gold plunged 10%. The analysts argue this is not a contradiction to risk-off sentiment but a direct result of it.
Geopolitical Fragmentation Drives Settlement Demand
The firm highlights that the old assumption—Bitcoin would sell off like risky tech stocks during crises—is being upended. As global financial systems crack, demand for neutral, non-sovereign money is rising sharply. Reports that Iran is willing to accept Bitcoin in oil-related payments reinforce the experimental drive: sanctioned nations are actively seeking depoliticized alternatives. Bitwise frames this as a second bet for Bitcoin beyond digital gold: international trade settlement currency.
Two Bets in One: Store of Value and Medium of Exchange
Bitwise repositions Bitcoin’s investment case as a dual wager. The first layer, store of value, is well understood. The second layer—settlement currency—was long overlooked but is now gaining traction. The weaponization of financial infrastructure (e.g., Russia’s SWIFT exclusion in 2022) has pushed trade flows toward alternative systems, eroding dollar dominance at the margins and opening space for non-dollar payment rails like Bitcoin.
Valuation Rethink: $1M as the New Baseline
The memo compares Bitcoin’s monetary adoption to an out-of-the-money call option whose value explodes exponentially when the probability of mass adoption rises and global volatility increases. Both conditions are now present. Bitwise concludes that if Bitcoin captures meaningful shares of both the store-of-value market and global transaction liquidity, all current price targets underestimate its potential. Under this new strategic lens, $1 million becomes the baseline price, not a ceiling.