TLDR
- Arthur Hayes, BitMEX co-founder, believes escalating US-Iran tensions may force the Federal Reserve into rate cuts and monetary expansion
- Hayes identifies a recurring historical pattern since 1985 linking major US Middle East wars to subsequent Fed monetary easing
- Examples include monetary policy responses following the Gulf War, September 11 attacks, and the Afghanistan troop surge in 2009
- While maintaining a long-term bullish Bitcoin outlook, Hayes recommends waiting for confirmed Fed action before entering positions
- At publication time, Bitcoin traded near $66,200, approximately 47% below its record high
In an essay released March 2, Arthur Hayesâthe co-founder of cryptocurrency exchange BitMEXâoutlined his thesis that escalating US military engagement with Iran increases the likelihood of Federal Reserve interest rate reductions and quantitative easing.
According to Hayes, such monetary policy shifts would create favorable conditions for Bitcoin.
His analysis rests on what he describes as a consistent pattern observable since 1985. Throughout this period, each US administration has initiated military operations in the Middle East, with the Federal Reserve subsequently implementing some form of accommodative monetary policy.
Hayes highlighted three specific historical instances. When the Gulf War began in 1990, the Fed implemented rate cuts in both November and December despite ongoing inflationary pressures linked to rising oil prices.
Following the terrorist attacks of September 11, 2001, Federal Reserve Chairman Alan Greenspan implemented an emergency 50-basis-point rate reduction. The subsequent military campaigns in Afghanistan and Iraq coincided with a prolonged period of monetary easing.
During the 2009 surge of US forces in Afghanistan under the Obama administration, interest rates were already at zero, and the Fed had already launched its quantitative easing program.
Hayes contends that Trump’s approach to Iran follows this established pattern. He notes that regime change in Iran has remained a bipartisan foreign policy objective since 1979, providing political justification for the Fed to implement accommodative policies.
Following weekend airstrikes by the US and Israel that resulted in the death of Supreme Leader Ali Khamenei, President Trump committed to continuing military operations.
Hayes Urges Caution Before Buying
Notwithstanding his optimistic long-term outlook, Hayes isn’t advising immediate investment. He recommends waiting for concrete Fed actionâactual rate cuts or the initiation of money printingâbefore increasing Bitcoin or cryptocurrency holdings.
“The time to back up the truck and buy Bitcoin and high-quality shitcoins is immediately after the Fed cuts rates and or prints money,” he wrote.
He also acknowledged uncertainty about how long Trump will stay committed to the conflict. He called the “prudent action” to wait and see.
Where Bitcoin Stands Now
Bitcoin was priced around $66,200 when Hayes released his analysis. This represents a year-over-year decline of nearly 30% and sits roughly 47% beneath its record peak of $126,000 reached in October 2025.
The cryptocurrency has experienced five consecutive months of decline. The Crypto Fear and Greed Index continues registering extreme fear levels.
Financial markets displayed relatively muted reactions to the Iran developments. US stock index futures opened Monday with only modest losses. The S&P 500 declined less than 1%.
Crude oil prices initially surged but subsequently relinquished nearly half their gains. The Kobeissi Letter, a macro-focused financial newsletter, observed that futures market action was “not anywhere near WW3.”
Data analytics firm Santiment reported increased mentions of “World War 3” across crypto social media platforms over the weekend, though activity levels remained below those observed during the June 2025 Israel-Iran escalation.
Bitcoin had declined approximately 1.9% for the day at the time of writing.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
