Bitcoin has gone up by 12% since the Iran conflict started, while the S&P 500 and Gold have each dropped by 1% and 10%, respectively. The dollar's influence declines, Bitcoin is acting like an "out-of-the-money call option" for international payments.
suggestion that a $1 million price for Bitcoin could be a starting point if it keeps developing as both a store of value and a form of money. Bitcoin's recent performance during rising geopolitical tensions shows a bigger change in global finance.
Bitcoin's behavior during the Iran conflict shows how it's changing its role in a split financial world. Since the US-Israel war against Iran began in late February, Bitcoin has gone up about 12%, while the S&P 500 and Gold have each gone down by 1% and 10%, respectively. This has made people rethink the idea of Bitcoin as a risky asset that weakens during political crises.
BTC vs Gold, Stocks. Source:
Two common reasons for Bitcoin's strength. "Some say geopolitics doesn't affect Bitcoin, while others say war usually leads to more money printing, which helps Bitcoin in the long run, but both are wrong.
Long-term forecast for Bitcoin to reach $1 million could "look like a starting point" if Bitcoin becomes a global currency and store of value. Bitcoin as a bet on both digital Gold and a global currency.
The first idea is its rise as digital Gold, competing for a share of the estimated $38 trillion global store-of-value market. The second idea is Bitcoin as a neutral, borderless settlement tool. This an "out-of-the-money call option" that gains value as more people adopt it. The chance of widespread adoption has risen significantly in recent years, especially after Russia's invasion of Ukraine in 2022.
In response to the invasion, the US and its allies removed major Russian banks from the SWIFT system. Instead of cutting Russia off, this move helped push trends away from using the dollar. "Countries became hesitant to deal in dollars for political reasons," explaining that these moves create demand for politically neutral alternatives like Bitcoin. The point is recent changes in the Middle East as more proof of this shift. Iran's oil agency reportedly announced last week plans to collect a $1-per-barrel transit fee, roughly $20 million per day, from ships passing through the Strait of Hormuz, payable in Bitcoin.
The bigger picture is that geopolitical conflicts are making Bitcoin more strategically important. As tensions mess up traditional financial systems, the chance that Bitcoin will be used for neutral cross-border payments is growing. Bitcoin has kept recovering, briefly surpassing $75,000 before coming down a little to $74,700 at the time of writing. Related news Crypto Today: Bitcoin and Ethereum keep recovering, XRP stalls as retail investors return.
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