Bitcoin Is Not Just Digital Gold, Here Is Its Geopolitical Value According to Bitwise?

Bitcoin (BTC) has gained more attention, not just as a digital asset often referred to as "digital gold", but also due to its growing role in the geopolitical context.

According to Matt Hougan, Chief Investment Officer (CIO) of Bitwise, Bitcoin now shows additional value in global tensions like the situation between the United States and Iran.

This indicates that Bitcoin is not just a store of value, but also can serve as a neutral asset for cross-border transactions.

During the period of tension between the US, Iran, and Israel, the price of Bitcoin rose by about 12%.

Bitcoin's success even outperformed the performance of the S&P 500 and gold, which both dropped 1% and 10%, respectively, during the same period. This shows a significant shift in how the market views Bitcoin in the context of global geopolitical tensions.

Key Takeaways

• Bitcoin is now increasingly seen as a politically neutral asset that can be used for cross-border settlement, not just as "digital gold".
• The 12% rise in Bitcoin's price during US-Iran tensions shows growing interest in Bitcoin as a neutral payment tool.
• Bitwise estimates that Bitcoin could reach a price of $1 million as an initial point if its role as a store of value and international payment system expands.

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What is Bitcoin and Its Geopolitical Value?

Bitcoin is widely known as a cryptocurrency that serves as a store of value, or often referred to as "digital gold".

However, with the growing geopolitical tensions and shifts in the global financial system, Bitcoin is now gaining a new role as a neutral transaction tool.

According to Bitwise, Bitcoin shows potential not only as a store of value but also as a tool for cross-border settlement that is not bound by any country's policies.

Bitcoin as a Neutral Payment Tool

Bitwise notes that Bitcoin's price has shown significant increases during geopolitical tensions, particularly during the US-Iran conflict.

This indicates that Bitcoin is not just seen as a high-risk asset that tends to fall during periods of tension but also as a more stable and reliable alternative for international transactions that do not rely on conventional monetary systems.

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Bitwise's View on Bitcoin's Role in Global Geopolitics?

Bitwise sees Bitcoin as two investment opportunities at once. First, Bitcoin competes with gold in the global store-of-value market. Secondly, and perhaps more recently, Bitcoin can function as a settlement currency in international trade.

Bitwise describes this role as a "call option out-of-the-money," meaning Bitcoin has the potential to increase in value as the possibility of adoption in international trade grows.

Also Read: Easy Steps to Safely Invest in Bitcoin

How Do Geopolitical Changes Affect Bitcoin?

After Russia was removed from the SWIFT system in 2022, countries began looking for ways to reduce their dependence on dollar-based settlement systems. This spurred interest in non-dollar alternatives, including local currencies and digital assets like Bitcoin.

This situation further emphasizes that Bitcoin could be an attractive alternative for countries seeking a more decentralized settlement system that does not rely on any particular nation or policy.

Report from the Middle East: Bitcoin for Oil Transaction Payments?

Some reports from the Middle East suggest that Iran's oil export sector is considering using Bitcoin for payments related to transit through the Strait of Hormuz.

Although widespread adoption of Bitcoin has not been confirmed, these reports indicate that countries facing pressure in traditional financial systems are starting to consider more neutral alternatives for some of their transactions.

Also Read:Short-Term Trading Bitcoin (BTC) Failed? Try Dollar-Cost Averaging

What Makes Bitcoin Different from Digital Gold?

Bitcoin is no longer just seen as "digital gold" as it was often referred to earlier. The rapid increase in Bitcoin's price during periods of geopolitical tension shows that Bitcoin is more than just a store of value asset.

With the potential to be used in more secure international transactions without involving centralized third parties, Bitcoin is increasingly recognized as a financial solution that can break political and geographical boundaries. Are you interested in buy Bitcoin (BTC)?

Conclusion

Bitcoin (BTC) is increasingly showing its broader role beyond just a store of value or "digital gold". In the context of global geopolitical tensions, such as the US-Iran conflict, Bitcoin functions as a more neutral tool for cross-border settlement.

Bitcoin's role as a neutral currency is becoming increasingly important as interest in alternative payment systems that do not rely on a specific currency or policy grows.

While predictions suggest Bitcoin could reach $1 million, its value will continue to be recognized as adoption expands in various international financial sectors.

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FAQ 

What is Bitcoin and its geopolitical value?

Bitcoin is a cryptocurrency that functions as a store of value or "digital gold". Its geopolitical value arises from its ability to be used in international transactions without being tied to any particular country's policy.

How does Bitcoin play a role in geopolitical conflicts such as US-Iran?

Bitcoin saw a price increase during the US-Iran tensions, indicating that Bitcoin functions as a neutral payment tool that can be used outside traditional monetary systems.

Why is Bitcoin referred to as "digital gold"?

Bitcoin is often called "digital gold" because of its function as a relatively stable store of value, similar to gold, but in digital form.

Can Bitcoin become a global currency?

Although it hasn't yet become a globally accepted currency, Bitcoin is increasingly seen as a more neutral alternative for international settlement transactions.

Is Bitcoin suitable for long-term investment?

Bitcoin could be a good long-term investment choice for those seeking high growth potential, but, like any investment, there are risks to consider.