‘Chaos is a ladder’: Bitwise says geopolitical tension lifts bitcoin’s appeal, calls $1 million target a possible baseline price

Bitwise CIO Matt Hougan and Ryan Rasmussen, the firm’s head of research, opened a new note arguing that bitcoin’s (BTC) recent strength is not a contradiction of risk-off conditions, but a direct result of them.

Since U.S. and Israeli airstrikes began on Feb. 28, bitcoin has gained 12%, while the S&P 500 has slipped 1% and gold has fallen 10%. The divergence has unsettled conventional thinking that bitcoin should behave like a high-beta risk asset during geopolitical shocks.

Bitwise rejects that view outright. “Chaos is a ladder,” Hougan and Rasmussen wrote in a Tuesday memo to clients. They argue that bitcoin’s rally stems from the conflict itself, as fractures in the global financial system increase the appeal of neutral, non-sovereign money.

1776126304 btc sp500 gold since iran conflict memo 041326 — Bitcoin outperforms gold and U.S. stock market since late February | Image: Bitwise

Two bets

Bitwise frames bitcoin as “two bets in one.”

The first is familiar: a challenge to gold in the global store-of-value market. The second is less widely priced — a potential role as a settlement currency in international trade. Bitwise says that the second leg has historically been dismissed as unlikely but is now gaining traction.

According to the experts, the shift traces back to the weaponization of financial infrastructure.

After Russia’s removal from the SWIFT network in 2022, trade flows began rerouting through alternative systems, particularly in China. The result has been a steady erosion of dollar dominance at the margins, creating space for non-dollar rails.

Recent developments have only sharpened that trend, Hougan and Rasmussen noted.

Iran’s reported willingness to accept bitcoin for oil transit-related payments signals an openness, at least experimentally, to route around traditional systems.

Bitwise flagged that while sanctions still apply and blockchain transparency limits illicit use, the broader signal matters more. Experts posit that geopolitical fragmentation is pushing countries to explore apolitical alternatives.

Bitcoin’s valuation framework is directly impacted by this dynamic, per Bitwise. They liken the asset’s currency use case to an out-of-the-money call option, one that becomes more valuable as both the probability of adoption rises and global volatility increases.

Both conditions are now in play. The conflict has injected instability into the monetary order while simultaneously nudging bitcoin closer to real-world settlement use. In options terms, that combination boosts its embedded optionality.

$1 million starting point

The implication suggests that bitcoin’s role is evolving. Bitwise expects BTC to increasingly act as a hedge against geopolitical disorder, not just as a speculative asset tied to liquidity cycles.

This view also shifts long-term expectations. If bitcoin captures both store-of-value demand and a share of global transaction flows, the firm argues current price targets may understate its potential. Bitwise now points to a scenario where $1 million becomes a baseline rather than an upper bound.

As of April 13, bitcoin had reclaimed $74,000 amid military volatility in the Middle East continuing and sticky U.S. inflation, The Block’s price page shows.