Bitwise: Geopolitical conflicts reinforce Bitcoin's safe-haven narrative, $1 million may just be the beginning

As global investors become accustomed to classifying Bitcoin as a high-risk asset, the Middle East conflict in early 2026 is disrupting this cognitive framework. Cryptocurrency asset management firm Bitwise has issued a thought-provoking judgment in its latest client memo — that geopolitical tensions are not a barrier to Bitcoin, but rather a ladder for its value appreciation. Behind this assertion is a set of striking data: since the U.S.-Israel joint airstrike on Iran on February 28, Bitcoin has risen approximately 12%, while the S&P 500 index has fallen about 1%, and traditional safe-haven asset gold has declined roughly 10%.

Bitwise Chief Investment Officer Matt Hougan and Research Director Ryan Rasmussen straightforwardly state in the memo: “Chaos is a ladder.” This phrase, borrowed from a popular TV series, illustrates how cracks in the current global financial system are becoming catalysts for the value of non-sovereign, neutral assets like Bitcoin.

Market Attention Triggered by a Memo

On April 14, 2026, Bitwise released a memo jointly authored by CIO Matt Hougan and Research Director Ryan Rasmussen. The core argument of the memo is concise and direct: Bitcoin’s recent strength is not contrary to a risk-averse environment but is a direct result of geopolitical conflicts.

Titled “Chaos is a Ladder,” the memo directly responds to two prevalent market views — one is “Geopolitics has nothing to do with Bitcoin,” and the other is “War leads to long-term money printing benefits for Bitcoin.” Bitwise explicitly rejects these explanations, believing that Bitcoin’s performance during this crisis stems from structural fissures in the global financial system.

According to Gate market data, as of April 15, 2026, Bitcoin’s price was $74,234.1, with a 24-hour change of -0.15%, a market cap of approximately $1.33 trillion, and a market share of 55.27%. Since the conflict erupted at the end of February, Bitcoin has followed a trajectory of initial decline followed by recovery — on the day of the conflict, it briefly plunged to about $63,500, then continued to rebound over the following weeks, stabilizing above $74,000 by mid-April.

From “Black Swan” to “New Normal”

February 28, 2026: The U.S. and Israel launched a joint airstrike on Iran. According to CCTV News, U.S. President Trump announced the military strike aimed to “destroy Iran’s security system” and “completely dismantle the Iranian Navy.” On the day of the conflict, Bitcoin’s price plunged about 6%, briefly dropping below $64,000, with nearly $500 million in total contract liquidations and over 150,000 traders liquidated.

March 2026: The market experienced intense volatility. International oil prices surged about 50% within a month, reaching $107 per barrel at one point. Traditional safe-haven assets gold and silver experienced “air pocket” declines — gold from a historic high of about $5,600 per ounce to around $4,000. After an initial panic sell-off, Bitcoin gradually rebounded.

April 6, 2026: Bitcoin briefly broke above $73,000, then retreated due to the breakdown of U.S.-Iran negotiations and Trump’s announcement to blockade the Strait of Hormuz.

April 9, 2026: According to the Financial Times, an Iranian oil, gas, and petrochemical export union spokesperson announced that Iran would charge a toll of $1 per barrel for ships passing through the Strait of Hormuz, payable in Bitcoin. The toll for a single passage of a super-large oil tanker could reach up to about $2 million. This marked a key turning point in the event.

April 13, 2026: Bitcoin touched around $74,000 resistance but pulled back, remaining roughly 12% above pre-conflict levels.

April 14, 2026: Bitwise published a memo systematically explaining the core logic behind Bitcoin’s divergent performance amid this geopolitical crisis.

From the evolution of events, a clear “shock — divergence — reshaping” causal chain emerges:

First stage: The outbreak of conflict triggered a global panic sell-off. As a highly liquid asset traded 24/7, Bitcoin became a quick hedge outlet for funds against geopolitical risks, leading to sharp short-term declines. During traditional market closures, Bitcoin was the first to price in risk.

Second stage: As the market shifted from emotional reactions to rational assessment, the “weaponization” effect of the global financial system began to manifest. Historical precedents like Russia’s exclusion from SWIFT in 2022 showed that the use of dollar-based payment infrastructure as a geopolitical tool accelerated some countries’ exploration of non-sovereign settlement alternatives.

Third stage: Iran announced it would accept Bitcoin for toll payments through the Strait of Hormuz, marking Bitcoin’s first use at the sovereign level for settlement related to bulk commodities. The emergence of this real-world application directly re-priced the narrative of Bitcoin as an international settlement currency.

Data and Structural Analysis: Divergence Signal of 12% vs. -10%

Below is a comparison of core asset performance data provided by Bitwise, covering the period from the close on February 27, 2026, to April 10, 2026:

Performance of Bitcoin, gold, and stocks during the 2026 Iran conflict, source: Bitwise

The key anomaly in this data is: under traditional frameworks, Bitcoin, as a high-beta risk asset, should have led the decline in a risk-averse environment triggered by geopolitical shocks — and indeed, it did on the day the conflict broke out. However, over the subsequent month, Bitcoin not only recovered all losses but also posted significant gains, while gold declined about 10%.

This divergence points to a critical issue: Bitcoin’s risk profile may be undergoing a structural change. Notably, this pattern is not isolated. ChainCatcher data shows that since the conflict erupted, Bitcoin has gained a total of 16.76%, while silver has fallen 15.58%. As traditional safe-haven assets weaken collectively, Bitcoin’s relative strength further reinforces the credibility of the narrative divergence.

Beyond price performance, on-chain data also offers valuable insights. According to on-chain analysis, since 2026, Bitcoin’s daily transaction count has increased by 62%, reaching 765,130 on April 5 — a 17-month high, comparable to the level when Bitcoin first surpassed $100,000 during the 2024 U.S. presidential election. Glassnode reports that Bitcoin’s total fee income over the past week increased by 4%, indicating rising on-chain demand.

Meanwhile, exchange Bitcoin reserves continue to decline. Global exchange reserves have fallen to about 2,690,000 BTC — the lowest since early 2023. During heightened geopolitical uncertainty, large amounts of Bitcoin have been transferred to cold wallets, with the 30-day moving average of net exchange inflows remaining negative, indicating holders prefer long-term storage over short-term selling.

The resonance between on-chain data and price trends suggests that Bitcoin’s recent rally is not purely speculative but is accompanied by genuine network activity growth and supply-side contraction.

Three Narratives and Bitwise’s “Dual Bet”

Regarding Bitcoin’s performance amid this conflict, three main interpretive frameworks have emerged:

Geopolitics has little to do with Bitcoin

Proponents believe Bitcoin’s correlation with global geopolitical events is minimal, and its price fluctuations are mainly driven by internal factors (halving cycles, on-chain supply and demand, regulatory developments). The rise during the Middle East conflict is purely coincidental and unrelated to the conflict itself.

War money printing theory

This view holds that geopolitical conflicts often lead to government fiscal expansion and monetary issuance, which in the long run devalues fiat currencies and boosts scarce assets like Bitcoin. This logic attributes Bitcoin’s rise to expectations of future monetary policy rather than the conflict itself.

Financial system fragmentation hypothesis

Bitwise’s stance explicitly rejects the first two explanations. Hougan states in the memo: “Both are wrong.” Bitwise believes Bitcoin’s strength directly stems from the structural fissures in the global financial system revealed by the conflict — when dollar-centric payment infrastructure can be weaponized at any time, countries’ demand for de-politicized, non-sovereign settlement assets will naturally rise.

Bitwise’s “Dual Bet” Framework

Bitwise views holding Bitcoin as a “two-pronged bet”:

Digital gold narrative

Bitcoin challenges gold’s status as a global store of value. Bitwise estimates the global store of value market at about $38 trillion. If Bitcoin captures roughly 17% of this, its price could reach about $1 million. This logic has been widely discussed and partially priced in over the past two years.

International settlement currency narrative

Bitcoin could serve as a medium of exchange for international trade settlements. Bitwise compares this possibility to a “deep out-of-the-money call option” — its value increases with higher adoption probabilities and rising global volatility. Hougan notes: “If Bitcoin is more widely used for international settlement, this option will pay off.”

Previously, the second narrative was considered distant. However, after Russia’s exclusion from SWIFT in 2022, the share of RMB settlements in Sino-Russian trade surged from less than 2% to nearly 40%, vividly illustrating how financial sanctions accelerate the building of alternative payment channels. Hougan states, “Countries are becoming reluctant to use the dollar for political reasons,” which creates demand for politically neutral alternatives like Bitcoin.

Industry Impact Analysis

Bitcoin Asset Classification Framework Faces Reshaping

Bitcoin has long been classified as a “risk asset” or “high-beta tech asset” in traditional asset categories. Its significant divergence from gold during this geopolitical conflict — with Bitcoin rising about 12% and gold falling about 10% — challenges this classification.

If Bitcoin continues to exhibit negative correlation or independent behavior from traditional risk assets in future geopolitical events, institutional asset allocation models will need adjustment. This could shift Bitcoin’s role in portfolios from a “high-volatility alternative” to a “geopolitical hedge tool.”

Accelerating Non-Sovereign Settlement Track

The case of Iran accepting Bitcoin for Strait toll payments, though still in early stages, marks a shift from theoretical to practical validation of Bitcoin’s settlement currency narrative. Previously, this narrative was underestimated due to lack of sovereign-level applications.

From a macro perspective, the international monetary system is undergoing structural adjustments. The Cross-Border Interbank Payment System (CIPS) now covers over 190 countries and regions, and BRICS countries are advancing “digital currency interconnection” initiatives. As a digital native asset independent of any sovereign, Bitcoin occupies a unique position in this multipolar payment landscape.

Valuation Framework Adjustment and $1 Million Benchmark Hypothesis

The most forward-looking part of the Bitwise report is its proposed redefinition of valuation frameworks. If Bitcoin simultaneously captures global value storage demand and international settlement transaction flows, its long-term price may be systematically undervalued. The report repositions the $1 million target from a “ceiling” to a “possible benchmark price.”

This valuation adjustment is based on the logic that: traditional Bitcoin valuation models mainly focus on market share in value storage; once the settlement currency narrative is incorporated into pricing, Bitcoin’s potential market expands significantly. In options terms, both the “implied volatility” and “exercise probability” increase, boosting the embedded optionality value.

Conclusion

The brilliance of “Chaos is a ladder” lies in its capturing of the dual effects of geopolitical conflict — destructive to the traditional system, yet an opportunity for alternative solutions. Bitwise’s report is not merely a bullish stance but a calm observation of the structural fissures in the global financial system.

The long-standing view of Bitcoin as a settlement currency has been as an “out-of-the-money option” — valuable in theory but difficult to realize practically. The toll payments via the Strait of Hormuz, regardless of their ultimate implementation, have already pushed this narrative from pure theory toward practical validation. As the proportion of USD in global foreign exchange reserves continues to decline, alternative payment channels accelerate, and sovereign states openly explore non-dollar settlement schemes, Bitcoin’s role as a non-sovereign, neutral asset is undergoing a historic reassessment.

As of April 15, 2026, Bitcoin’s price is $74,234.1, with a market cap of $1.33 trillion and a market share of 55.27%. The evolution of Middle East tensions, the implementation of Iran’s Bitcoin toll scheme, and whether more countries follow suit will be key indicators testing the proposition that “chaos is a ladder.”