Arthur Hayes believes that a deepening US conflict with Iran could eventually become a bitcoin macro crisis, not because war is constructive for markets, but because it could push the Federal Reserve toward a cheaper, more abundant currency.
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In an iOS Warfare essay on March 2, the BitMEX founder laid out a simple thesis: if President Donald Trump pushes the US into a long and expensive campaign involving Iran, political and financial tensions could increase the likelihood of monetary easing. For Hayes, this is more important than the conflict itself. “The longer Trump engages in the outrageously expensive activity of Iran’s nation-building,” he wrote, “the more likely the feds will lower the price and increase the amount of money to support the latest Pax Americana adventurism in the Middle East.”
Hayes’ argument relies on a historical pattern rather than direct predictions about oil, geopolitics, or battlefield outcomes. He points to previous US military operations in the Middle East and says that major conflicts were easier or accompanied by monetary policy. In his reading, wars not only damage confidence and strain public finances; they also create an environment in which the Fed can help cut rates, support liquidity, and stabilize asset markets.
To support this view, Hayes cites several episodes dating back to the 1990s. After the start of the Gulf War, he notes that the Fed initially stayed put, but hinted that worsening conditions could force a change. From a debate on August 21, 1990, he quotes: “Increasing uncertainties and possibly less satisfactory economic performance caused by events in the Middle East have made it very difficult to formulate effective monetary policy. In the opinion of several members, events are likely to move in a direction that calls for the opposite of economic policy. in train before oil prices rise.”
He also highlights the Fed’s response after the September 2001 attacks and the start of the Global War on Terror. In an emergency meeting, then-Chairman Alan Greenspan said: “It is clear that the events of the past week have created at least a high degree of fear and uncertainty, which will put significant pressure on asset prices and increase the likelihood of asset value deflation with its obvious effects on the economy. That is why I am proposing to cut the Fed rate to 50%.”
For Hayes, these episodes show that geopolitical shocks can turn into monetary events. His description is stark: when war reduces confidence, threatens growth, or puts pressure on markets, the policy response is usually lower rates and more liquidity. This, in turn, is the basis for his belief that Bitcoin is favored.
However, Hayes does not call for immediate risk trading. He says the market still doesn’t know how committed Trump will be to restructuring Iran, and how much market or political pain the administration can absorb before changing course. Therefore, he believes it is better for businesses to wait for policy approval rather than push the envelope too early.
“The smart thing to do is wait and see,” Hayes wrote. “The time to back up the truck and buy high-quality bitcoin and shitcoins like HYPE is right after the Fed cuts or prints rates to support the government’s goals in Iran.”
At press time, Bitcoin was worth $66,218.
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