BitMEX founder Arthur Hayes says the US Federal Reserve may ease its monetary policy to help finance the country’s conflict with Iran, boosting crypto markets.
Hayes said in a blog post on Monday that every US president since 1985 has launched military action in the Middle East, and each time, the Federal Reserve has responded by cutting rates and expanding money transfers to finance the conflict.
“The more Trump engages in extremely expensive Iranian national-building activities, the more likely the Fed will lower rates and increase the amount of money to support Pax America’s Middle East adventurism,” he added.
Hayes said the 1990 Gulf War, the Global War on Terror after the September 11, 2001 attacks and the so-called “surge” in Afghanistan in 2009 all led to Fed rate cuts or monetary easing.
Over the weekend, Israel and the US launched a series of airstrikes on Iran that killed the country’s Supreme Leader Ali Khamenei, which President Donald Trump has vowed to continue.
Hayes advises to wait and see
“We don’t know how long Trump will continue to be interested in spending billions, if not trillions, of dollars to reshape Iran policy to his liking, and how much geopolitical and financial market pain he can tolerate politically before cutting and manipulating him,” Hayes said. “The smart thing to do is wait and see.”
“The time to back up the truck and buy high-quality bitcoin and shitcoins (…) is right after the Fed cuts rates or prints money to support the government’s goals in Iran,” he said.
Hayes has recently shared other theories about how the Fed might approach monetary policy, saying in the past three months that the Fed could use quantitative easing due to a new liquidity tool called Reserve Management Purchases, or to resolve the Japanese bond crisis, or because artificial intelligence is taking jobs that are causing the credit crisis.
related to: Bitcoin Traders Watch for Iran Reactions as Oil Triggers US Inflation Forecast of 5%
Futures are only pointing to a final decline
According to Sentiment, following the attacks by Israel and the US on Iran, crypto social media saw a spike in mentions of “World War 3” over the weekend.
However, these mentions pale in comparison to June 2025, when Israel launched an attack on Iran’s nuclear and military sites, provoking a 12-day standoff.
Macro newsletter The Kobeissi Letter said, “This futures open is not close to War 3,” referring to U.S. stock futures, which opened very low in early trading on Monday.
Oil prices have already erased about half of their open gap, and the S&P 500 is down less than 1%, he added.
Magazine: Would Bitcoin Really Be $200K If Not For Jane Street? Trade secret
