Arthur Hayes Says Escalating US-Iran Conflict Could Spur Fed Easing and Boost Bitcoin

BitMEX co-founder Arthur Hayes has long viewed Bitcoin’s performance through the lens of US dollar liquidity. He argues that a prolonged US-Iran war would drive up US military spending and government financing needs, forcing the Federal Reserve to cut interest rates or expand the money supply. Because Bitcoin is highly sensitive to global liquidity, he believes war spending could ultimately fuel gains in the cryptocurrency.

In the latest development, Hayes warned that markets are underpricing the risk of the Middle East war lasting for months. The White House also acknowledged that, by the sixth day of the war, military spending was already equivalent to roughly half of the US Bitcoin reserve. Hayes said Bitcoin could first fall below $60,000 before potentially reaching $250,000, but he would not invest even $1 until the Fed formally cuts rates or resumes printing money.