Key Takeaways
- • Bitcoin has gained 12% since U.S. and Israeli airstrikes began on February 28, 2026, while the S&P 500 declined 1% and gold fell 10%, contradicting conventional wisdom that bitcoin behaves as a high-beta risk asset during geopolitical stress.
- • Bitwise CIO Matt Hougan and head of research Ryan Rasmussen argue that geopolitical fractures increase demand for non-sovereign money, positioning bitcoin as benefiting from rather than suffering during periods of global instability.
- • Bitwise frames bitcoin as "two bets in one": a challenger to gold's dominance in the global store-of-value market, and an emerging settlement currency for international trade—the latter previously dismissed but now gaining credibility.
- • The thesis is anchored in structural shifts in global financial infrastructure, including Russia's 2022 removal from SWIFT and subsequent rerouting of trade flows through alternative systems, particularly in China, eroding dollar dominance at the margins.
- • Iran's reported openness to accepting bitcoin for oil transit-related payments exemplifies a growing willingness to route around traditional financial systems, lending empirical support to bitcoin's potential as a non-dollar settlement rail.
Summary
Bitwise has released a research note challenging conventional market assumptions about bitcoin's behavior during geopolitical shocks. Rather than treating bitcoin as a risk-on asset that should underperform alongside equities during periods of global instability, Bitwise CIO Matt Hougan and head of research Ryan Rasmussen argue that recent geopolitical tensions have directly catalyzed bitcoin appreciation. Since military operations began on February 28, 2026, bitcoin has appreciated 12% while equities and traditional safe-haven assets have retreated—the S&P 500 down 1% and gold down 10%—suggesting a decoupling in the asset's traditional risk characteristics.
The Bitwise thesis rests on the premise that fractures in global financial systems increase the institutional and structural appeal of neutral, non-sovereign money. Hougan and Rasmussen frame bitcoin as embodying "two bets in one." The first is the familiar narrative of bitcoin as a challenger to gold in the global store-of-value market. The second—less widely priced into current valuations—positions bitcoin as an emerging settlement currency for international trade, a role historically dismissed as implausible but now gaining empirical traction as geopolitical and financial fragmentation accelerates.
The foundation for this shift traces to the weaponization of financial infrastructure. Russia's removal from the SWIFT network in 2022 triggered a structural reordering of global trade flows, with transactions increasingly rerouting through alternative systems, particularly those operating through China. This gradual erosion of dollar dominance at the margins has created space for non-dollar settlement rails. Recent geopolitical developments have only sharpened this trend. Iran's reported willingness to accept bitcoin for oil transit-related payments signals an experimental openness—and institutional precedent—for sidestepping traditional payment systems entirely.
For sophisticated investors, the Bitwise analysis challenges static valuation models and suggests that bitcoin's store-of-value and settlement currency theses may be materially underpriced relative to the structural incentives now driving adoption among state and non-state actors seeking to circumvent sanctions regimes and financial coercion. The memo also references a $1 million price target as a possible baseline under scenarios modeling continued global fragmentation and bitcoin market penetration.
The Bitwise thesis rests on the premise that fractures in global financial systems increase the institutional and structural appeal of neutral, non-sovereign money. Hougan and Rasmussen frame bitcoin as embodying "two bets in one." The first is the familiar narrative of bitcoin as a challenger to gold in the global store-of-value market. The second—less widely priced into current valuations—positions bitcoin as an emerging settlement currency for international trade, a role historically dismissed as implausible but now gaining empirical traction as geopolitical and financial fragmentation accelerates.
The foundation for this shift traces to the weaponization of financial infrastructure. Russia's removal from the SWIFT network in 2022 triggered a structural reordering of global trade flows, with transactions increasingly rerouting through alternative systems, particularly those operating through China. This gradual erosion of dollar dominance at the margins has created space for non-dollar settlement rails. Recent geopolitical developments have only sharpened this trend. Iran's reported willingness to accept bitcoin for oil transit-related payments signals an experimental openness—and institutional precedent—for sidestepping traditional payment systems entirely.
For sophisticated investors, the Bitwise analysis challenges static valuation models and suggests that bitcoin's store-of-value and settlement currency theses may be materially underpriced relative to the structural incentives now driving adoption among state and non-state actors seeking to circumvent sanctions regimes and financial coercion. The memo also references a $1 million price target as a possible baseline under scenarios modeling continued global fragmentation and bitcoin market penetration.
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