Tensions with Iran may unleash Bitcoin's full potential, surpassing gold's value proposition, according to Bitwise analysis.

The potential for Bitcoin to become a widely accepted currency and store of value could catapult its market size beyond the $34 trillion gold market, asserts Matt Hougan, chief investment officer at Bitwise. Hougan's comments, made on Tuesday, highlighted Bitcoin's versatility in the face of global turmoil, citing Iran's proposal to accept cryptocurrency as payment for ships navigating the Strait of Hormuz as an example of its emerging role as a "currency-like" asset.

In Hougan's view, the escalating use of financial systems as a means of exerting control has positioned Bitcoin as a neutral, apolitical alternative, thereby expanding its potential market reach. This perspective suggests that Bitcoin's ultimate market size could far exceed the $38 trillion gold market, as it begins to fill dual roles as both a store of value and a medium of exchange.

Hougan's previous predictions indicate that if Bitcoin were to capture 17% of the store-of-value market over the next decade, its price could soar to $1 million per coin. However, if it also assumes a role as an international currency, its value could rise even further. As Hougan noted, "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."

Currently, Bitcoin is trading at approximately $74,500, with a market capitalization of around $1.4 trillion, according to data from CoinGecko. In contrast, gold is trading at $4,854 per ounce, with an estimated market capitalization of over $33.7 trillion as of Wednesday. Bitcoin has already gained traction as a store of value in countries experiencing high inflation, such as Argentina, Turkey, and Venezuela, where citizens are increasingly turning to cryptocurrency to safeguard their wealth.

A survey conducted by Coinbase in January found that 87% of Argentinians view crypto and blockchain technology as a means of enhancing their financial independence, with nearly three-quarters of respondents seeing cryptocurrency as a solution to challenges like inflation. Furthermore, corporates are also embracing Bitcoin, with private and public companies tracked by BitBo holding over 1.5 million Bitcoins, valued at more than $116 billion.

In addition to its role as a store of value, Bitcoin is also gaining ground as a payment method, with around 11,000 merchants worldwide accepting it as a form of payment, according to data from Springer Nature. As Bitcoin continues to evolve and expand its use cases, its potential to disrupt traditional markets and become a mainstream currency and store of value grows increasingly likely.