Arthur Hayes said the US Federal Reserve may be forced to cut rates or expand the money supply if President Donald Trump prolongs military engagement with Iran.
Hayes argued that since 1985 every US president who launched military action in the Middle East was followed by monetary easing, citing the Gulf War, the post-9/11 conflict and the 2009 Afghanistan surge as examples of rate cuts or liquidity expansion.
“The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood that the Fed lowers the price and increases the quantity of money to support Pax Americana’s latest bout of Middle Eastern adventurism,”
Said Arthur Hayes.
He added that investors should adopt a wait-and-see approach until monetary policy shifts become clearer, suggesting that the optimal time to buy bitcoin and other digital assets would be immediately after the Fed cuts rates or resumes money printing.
Hayes’ comments follow US and Israeli airstrikes on Iran that reportedly killed Supreme Leader Ali Khamenei, with Trump pledging to continue operations, raising concerns about prolonged geopolitical and fiscal strain, and following the announcement the BitMEX share price was unchanged at $N/A.