BitMEX co-founder Arthur Hayes argued that escalating US military involvement in Iran could ultimately boost bitcoin if it prompts the Federal Reserve to cut rates or expand liquidity.
In a March 1 essay, Hayes said prolonged Middle East conflicts historically pressure US policymakers into monetary easing to finance war efforts, a dynamic he believes benefits scarce assets such as bitcoin.
“The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood the Fed lowers the price and increases the quantity of money to support Pax Americana’s latest bout of Middle Eastern adventurism,”
Hayes wrote.
He cited the 1990 Gulf War, when Federal Open Market Committee minutes noted that:
“Events in the Middle East had greatly complicated the formulation of an effective monetary policy,”
Followed by rate cuts later that year, as well as a 50 basis point reduction after the September 11 attacks.
Bitcoin initially fell from $66,000 to about $63,600 following reports of strikes on February 28 before rebounding to around $67,000, and was last trading near $66,800, down less than 1% on the day but more than 20% lower over the past month.
Hayes noted that bitcoin has posted five consecutive months of losses, its longest negative streak since 2018, shedding nearly 15% in February alone.
“The prudent action is to wait and see,”
He said, adding that the optimal time to accumulate bitcoin and other digital assets would be after the Federal Reserve formally cuts rates or resumes money printing rather than during the initial phase of geopolitical turmoil.
At the time of reporting, Bitcoin price was $68,515.52.