Bitcoin’s Dual Masquerade: Gold’s Rival and Currency’s Heir Apparent

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Ah, the world of Bitcoin, where the only thing more volatile than its price is the wit of those who attempt to decipher its purpose. Matt Hougan, the Chief Investment Officer of Bitwise, declares with the gravity of a soothsayer that Bitcoin’s recent rally is no mere fluke, but a structural repricing of its dual nature-both digital gold and a currency. How delightfully paradoxical!

The argument, my dear reader, hinges on what Hougan dubs the “two bets in one” framework. For five long years, the market has priced Bitcoin as a store of value, a digital fortress against the ravages of inflation. But lo! Iran’s audacious decision to collect crypto tolls at the Strait of Hormuz-one of the world’s busiest shipping lanes-suggests a second, far grander use case is now in play. How quaintly revolutionary!

Bitcoin: No Longer Content with Merely Being Digital Gold

In a recent post, Hougan, with the air of a man who has just discovered fire, pointed to BTC’s resilience amid the war. Bitcoin, that incorrigible upstart, has rallied 12.25% since the US and Israeli airstrikes on Iran began on February 28. It has outshone gold (down 8.69%) and the S&P 500 (up a mere 1.29%), defying the naysayers who predicted its demise as a risk asset during geopolitical turmoil. How deliciously ironic!

The cryptocurrency, it seems, is not merely a fair-weather friend but a stalwart companion in times of crisis. Hougan, with a flourish, dismisses the notion that geopolitics is irrelevant to Bitcoin, declaring that its strength stems directly from the conflict itself. How profoundly insightful!

“Some have argued that geopolitics is irrelevant for bitcoin, while others have pointed out that war often leads to money printing, which tends to boost bitcoin in the long term. Both arguments are wrong. Bitcoin’s strength during this crisis stems directly from the conflict itself,” he said, with the air of a man who has just solved the riddle of the Sphinx.

Hougan, ever the optimist, argues that every Bitcoin buyer is making two simultaneous wagers. The first, the familiar digital gold thesis, is a bet that Bitcoin will dethrone physical gold in the $38 trillion “store of value” market. How ambitiously grandiose!

“You’re betting that bitcoin will become ‘digital gold’ and compete with physical gold in the $38 trillion ‘store of value’ market. That’s bitcoin’s current use case, and I consider it a very attractive bet. As I’ve explained here in the past, bitcoin can reach $1 million by capturing just 17% of this market over the next decade,” he added, with the confidence of a man who has already counted his chickens.

But the second bet, ah, the second bet is where the true drama unfolds. It hinges on the possibility that Bitcoin “might act like a traditional currency.” How delightfully mundane, yet profoundly transformative!

“I’ve historically thought of this second bet as an out-of-the-money call option: a speculative bet on an unlikely future,” Hougan remarked, with the air of a gambler who has just rolled the dice.

Until recently, this idea seemed as remote as a snowflake in the Sahara. However, Hougan points to the 2022 decision by the US and its allies to remove selected Russian banks from SWIFT. In response, countries like China developed alternative financial systems, with Russia shifting nearly all its transactions to these networks. How geopolitically intriguing!

“I mused at the time that the weaponization of SWIFT might one day open up space for bitcoin: If countries grew reluctant to deal in dollars, it stood to reason that they might prefer an apolitical alternative at some point. And indeed, during the Iran conflict, we saw one of the earliest (and more uncomfortable) examples of this happening,” Hougan explained, with the satisfaction of a prophet whose predictions have come to pass.

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Iran’s Bitcoin Toll: The Currency Thesis Awakens

BeInCrypto reported that Iran planned to collect a $1-per-barrel toll on ships transiting the Strait of Hormuz, payable in Bitcoin. The move raises sanctions compliance concerns, but according to Hougan,

“At the same time, it points to a reality that transcends the current conflict: In a world where countries have weaponized their financial rails, bitcoin is emerging as an apolitical alternative.” How marvelously prescient!

Hougan, ever the theoretician, frames BTC’s potential as a currency through options pricing theory. An out-of-the-money call option gains value when two things happen: the probability of hitting the strike price improves, or volatility in the underlying market increases. The Iran conflict delivered both. How fortuitously timed!

The probability of Bitcoin functioning as a currency jumped with Iran’s toll system, and the volatility of the global monetary order spiked. Hougan argues that this perspective highlights two key implications for Bitcoin’s trajectory. For one, it suggests the asset could gain during periods of geopolitical tension, especially in regions caught between the US and Chinese spheres. It also indicates that Bitcoin’s potential market extends well beyond gold’s $38 trillion valuation. How expansively ambitious!

“We’ve spent the past five years talking about bitcoin exclusively as a ‘store of value.’ If bitcoin starts to take on a dual role as both a store of value (like gold) and an actual currency (like the dollar), we may need to revise our targets higher,” Hougan stated, with the air of a man who has just discovered a new continent.

Thus, the five-year “store of value” narrative served Bitcoin well. What comes next could dwarf it. How gloriously uncertain!

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2026-04-15 15:36