TLDR
- Arthur Hayes, BitMEX co-founder, believes extended US-Iran military tensions may force the Federal Reserve into rate reductions and monetary expansion
- Hayes identifies a recurring trend dating back to 1985 linking major Middle East wars to subsequent Fed monetary loosening
- Historical examples include the Gulf War, post-September 11 conflicts, and the 2009 Afghanistan troop surge
- While maintaining a bullish long-term Bitcoin outlook, Hayes recommends patience until Fed policy actually shifts
- Bitcoin was hovering near $66,200 when published, representing approximately 47% decline from peak levels
BitMEX co-founder Arthur Hayes released an analytical piece on March 2 suggesting that American military engagement with Iran increases the probability of Federal Reserve interest rate reductions and expansionary monetary policy.
According to Hayes, such developments would create favorable conditions for Bitcoin.
His thesis rests on what he describes as a consistent pattern observable since 1985. Throughout this period, every sitting US president has initiated military operations in the Middle East region, with the Federal Reserve subsequently implementing monetary accommodation.
Hayes highlighted three particular instances. When the 1990 Gulf War occurred, the Federal Reserve reduced interest rates in both November and December despite persistent oil-related inflationary pressures.
Following the September 11, 2001 terrorist attacks, Federal Reserve Chairman Alan Greenspan implemented an emergency 50-basis-point rate reduction. The ensuing military campaigns in Afghanistan and Iraq were accompanied by a prolonged period of monetary easing.
During the 2009 Afghanistan troop increase under the Obama administration, interest rates had already reached zero and the Fed had already initiated quantitative easing programs.
Hayes contends that President Trump’s Iranian involvement mirrors this established pattern. He notes that achieving Iranian regime change has been a consistent objective for American policymakers from both political parties since 1979, providing the Fed with political justification for accommodative policy.
Recent weekend events saw the United States and Israel execute airstrikes against Iran resulting in the death of Supreme Leader Ali Khamenei. President Trump committed to continuing military operations.
Hayes Urges Caution Before Buying
Despite presenting a bullish argument, Hayes stops short of recommending immediate purchases. He advocates waiting for concrete Federal Reserve action—actual rate cuts or money printing—before increasing Bitcoin or alternative cryptocurrency 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 exchanging hands around $66,200 when Hayes published his analysis. This represents a nearly 30% year-over-year decline and sits approximately 47% beneath its record peak of $126,000, achieved 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 demonstrated relatively muted reactions to Iranian developments. US equity futures opened Monday with only modest declines. The S&P 500 index dropped less than 1%.
Crude oil prices initially surged but subsequently retreated, surrendering nearly half their early gains. Macro analysis newsletter The Kobeissi Letter observed that the futures market opening was “not anywhere near WW3.”
Cryptocurrency social media platforms experienced increased “World War 3” discussion volume over the weekend according to analytics provider Santiment, though engagement remained below levels seen during the June 2025 Israel-Iran confrontation.
Bitcoin had declined approximately 1.9% for the day at the time of this writing.
Remember: Preserve all tokens like [[EMBED_0]], [[IMG_0]], [[LINK_START_0]], [[LINK_END_0]], [[SCRIPT_0]], [[FIGURE_0]] etc. exactly as they appear. These are placeholders for embeds, images, and links that must not be changed.
