Arthur Hayes recently published an analysis suggesting that the US's prolonged involvement in tensions with Iran could support Bitcoin prices in the medium and long term. Hayes argues that since 1985, every US president has conducted military action in the Middle East, and he believes former President Donald Trump will continue this trend. According to him, if the US maintains prolonged military involvement, the financial costs will increase significantly.
The Fed may have to ease policy.
Hayes argues that to finance conflict-related expenditures, the Federal Reserve may be forced to provide support through interest rate cuts or expanding the money supply. He notes that historically, low interest rates and abundant liquidation have often benefited risky assets, including Bitcoin. Therefore, if a monetary easing scenario occurs, Bitcoin could benefit.
However, Hayes also acknowledged that it remains unclear how long the US will maintain its level of involvement, as well as the total financial cost. He argued that it is difficult to assess the limits of the financial system and markets' resilience to prolonged geopolitical shocks. Regarding his personal trading strategy, Hayes stated that he will wait for clear signals of a change in Fed policy before making his next investment decision.
