Bitwise Chief Investment Officer Matt Hougan says Bitcoin’s recent surge is being powered by global instability rather than pure speculation.
Bitcoin has continued to climb even as geopolitical tensions intensify, challenging the long held belief that it behaves like a risk asset that should fall during crises. The cryptocurrency recently approached seventy five thousand dollars, its highest level in nearly a month, while traditional markets showed weakness.
Hougan argues that this price action is not accidental. In his view, Bitcoin is benefiting directly from uncertainty around the world, which contradicts the idea that it should decline during periods of conflict or instability.
Shifting Strength of the US Dollar System
Since airstrikes by the United States and Israel began on February twenty eighth, Bitcoin has gained about thirteen percent. Over the same period, the S and P five hundred has fallen by one percent, while gold has dropped by ten percent. This separation has challenged the assumption that Bitcoin behaves only as a risk driven asset.
Hougan explains that Bitcoin serves two key functions. The first is its role as a store of value, often compared to gold. The second is its potential future role as a global currency used for cross border transactions.
While the currency function is still developing, it becomes more relevant during times of instability when traditional financial systems face stress.
Geopolitical conflict tends to reinforce both roles at the same time. It increases demand for alternative stores of value and also exposes vulnerabilities in the current dollar centered financial system. A major example of this shift came after Russia’s invasion of Ukraine.
Following that event, Russian banks were removed from the SWIFT network, limiting their access to global financial infrastructure. This move highlighted how dollar linked systems can be restricted for political reasons, prompting some countries to explore alternatives.
China expanded its involvement in global settlement systems, and trade between Russia and China increasingly shifted toward local currencies instead of the US dollar. Over time, this reduced dependence on dollar based payment rails and showed that alternative systems can emerge when needed.
These developments are significant for Bitcoin because they highlight growing interest in neutral payment systems that are not controlled by any single government. Hougan believes that in such environments, Bitcoin becomes more relevant as an apolitical option that can operate alongside existing systems, especially for international payments.
Bitcoin as an Emerging Option in Global Trade
The ongoing conflict involving Iran provides a recent example of this trend. Hougan referenced reports suggesting that Iran’s oil authorities are considering collecting transit fees from ships passing through the Strait of Hormuz using Bitcoin. This indicates that in times of conflict, some governments may explore digital assets for real world transactions.
Although concerns exist around sanctions evasion, Hougan emphasized that Bitcoin does not bypass legal requirements. All transactions are recorded on the blockchain, and participants must still comply with regulations such as those set by the United States Treasury, or risk penalties. This transparency makes it difficult to use Bitcoin as a simple tool for avoiding restrictions.
As countries continue exploring new settlement methods during geopolitical tension, Bitcoin’s potential role in global payments may gradually increase. Hougan compared Bitcoin to an out of the money call option, meaning its value rises when the probability of wider adoption increases or when global financial volatility intensifies.
He added that geopolitical conflict contributes to both factors by creating uncertainty in existing systems while encouraging nations to consider alternatives. The current situation in the Middle East has reinforced this trend by increasing instability and introducing real world scenarios where Bitcoin is being considered for cross border payments.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
