TLDR
- Arthur Hayes, BitMEX co-founder, believes escalating U.S.-Iran tensions may force the Federal Reserve into rate cuts and expanded money supply
- Hayes identifies a recurring trend since 1985: major U.S. military operations in the Middle East have consistently preceded Fed monetary easing
- Historical examples include the Gulf War, post-September 11 conflicts, and the 2009 Afghanistan troop surge
- While bullish on Bitcoin long-term, Hayes recommends investors delay purchases until the Fed implements actual policy changes
- At publication time, Bitcoin traded near $66,200, representing a roughly 47% decline from its peak value
In a March 2 essay, BitMEX co-founder Arthur Hayes presented his case that escalating U.S. military engagement with Iran increases the probability of Federal Reserve interest rate reductions and monetary expansion.
According to Hayes, such monetary policy shifts would create favorable conditions for Bitcoin.
His thesis rests on an observable pattern extending back to 1985. Hayes notes that every American president during this period has initiated military operations in the Middle East, with the Federal Reserve subsequently implementing accommodative monetary policy.
Hayes highlighted three concrete instances. When the 1990 Gulf War occurred, the Fed reduced interest rates in both November and December despite ongoing inflationary pressures driven by 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 wars in both Afghanistan and Iraq were accompanied by an extended period of monetary accommodation.
By the time of the 2009 Afghanistan surge under the Obama administration, interest rates had already reached zero, prompting the Fed to deploy quantitative easing measures.
Hayes contends that Trump’s Iran involvement mirrors this established pattern. He suggests that bipartisan support for Iranian regime change dating back to 1979 provides the Federal Reserve with political justification to implement easing policies in support of military objectives.
Recent weekend airstrikes by the U.S. and Israel on Iran resulted in the death of Supreme Leader Ali Khamenei. President Trump has committed to continuing the military campaign.
Hayes Urges Caution Before Buying
While Hayes maintains a bullish outlook, he’s not advocating immediate investment action. He recommends waiting for concrete Fed policy implementation before increasing Bitcoin or altcoin positions.
“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 hovering around $66,200 when Hayes released his analysis. This represents a nearly 30% year-over-year decline and sits approximately 47% below the cryptocurrency’s all-time high of $126,000, reached in October 2025.
The cryptocurrency has experienced five consecutive months of losses. The Crypto Fear and Greed Index continues registering extreme fear levels.
Financial markets displayed measured reactions to the Iran developments. U.S. stock futures showed only modest declines when markets opened Monday. The S&P 500 declined less than 1%.
Oil prices initially surged but subsequently relinquished nearly half their gains. The Kobeissi Letter, a macro-focused newsletter, observed that futures market activity was “not anywhere near WW3.”
Cryptocurrency social media platforms witnessed increased “World War 3” mentions over the weekend according to analytics provider Santiment, though engagement levels remained below those observed during the June 2025 Israel-Iran confrontation.
Bitcoin had declined approximately 1.9% for the day at the time of publication.
