Bitwise Chief Investment Officer (CIO) Matt Hougan has explained why the Bitcoin price has proven strong during this period the war between the US and Iranwith the leading cryptocurrency rising above $75,000. BTC has risen more than 12% since the start of the war, outperforming the stock market and gold.
Why Bitcoin Price Surged Above $75,000 Despite US-Iran War
In his weekly Bitwise memoHougan stated that Bitcoin’s price strength during the US-Iran war stems from the conflict itself. He explained that BTC has outperformed gold and the stock market as investors bet on one of the two main use cases or stories of the crypto. The first story is that Bitcoin will become “digital gold”. and will thus be able to compete with physical gold in the $38 trillion store of value market.
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He noted that this is BTC’s current use case, and this story could be the reason the Bitcoin price has rebounded during the US-Iran war as investors view the country as a safe haven rather than a risk asset. The Bitwise CIO described this bet on BTC as digital gold as very attractive, predicting that the leading crypto could reach $1 million if it captures 17% of the store of value market.
Meanwhile, Hougan stated that the second bet on BTC is the belief that it could behave like a traditional currency, suggesting that this is another reason why it is performing better during this ongoing conflict. He noted that this second bet is akin to an out-of-the-money call option, where it will pay off if BTC is more widely used for international settlement.
The Bitwise CIO stated that for most of Bitcoin’s life, it seemed unlikely that it would become a global currency, as the world relied solely on dollar-based financial rails until a few years ago. However, that is now changing. He alluded to Iran receives BTC for toll payments in the Strait of Hormuz, which has strengthened crypto’s status as a currency and contributed to Bitcoin’s price rise.
The global monetary order is turning in BTC’s favor
The Bitwise CIO noted that the US-Iran war has made the global monetary order more volatile, but also increased the likelihood that Bitcoin will become a global currency. As such, the war has made BTC a more valuable out-of-the-money call option. Therefore, the Bitcoin price has shown strength during this period.
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Hougan added that Iran wanted to accept the proposal BTC paymentshas taken the world one step closer to integrating an apolitical currency into the global financial ecosystem. When conflicts such as the US-Iran war occur, the incentive to invest in apolitical assets like BTC increases, serving as a catalyst for a higher Bitcoin price.
At the time of writing, the Bitcoin price is trading around $75,100, up in the past 24 hours. facts from CoinMarketCap.
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