Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, has published a detailed analysis arguing that a prolonged U.S. military conflict with Iran could pressure the Federal Reserve to cut interest rates and expand monetary policy, creating a bullish environment for Bitcoin and other cryptocurrencies.
In an essay published on March 2, 2026, Hayes posits that escalating tensions and a sustained military campaign would lead to significant increases in U.S. fiscal spending on war-related costs, including reconstruction. To support this spending, the Fed would likely be compelled to implement monetary easing. "If US-Iran tensions escalate, increased fiscal spending will become inevitable. To support this, the Fed will likely either lower interest rates or expand monetary policy," Hayes wrote. He believes this scenario would increase market liquidity, which historically supports the price of risky assets like Bitcoin.
Hayes bases his argument on a historical pattern observed since 1985, noting that every major U.S. military campaign in the Middle East has been followed by Federal Reserve easing. He cited specific examples: the Fed cut rates in November and December 1990 during the Gulf War despite oil-driven inflation; after the 9/11 attacks in 2001, then-Chair Alan Greenspan ordered an emergency 50-basis-point rate cut, followed by an extended easing cycle during the subsequent wars in Afghanistan and Iraq; and during the 2009 Afghanistan surge under President Obama, rates were at zero alongside quantitative easing programs.
Hayes argues that the goal of regime change in Iran provides bipartisan political cover for the Fed to ease policy in support of the military effort. "Regime change in Iran is a common goal for both Republicans and Democrats, and he believes this provides the Fed with a political justification for easing its monetary policy," the analysis states.
Despite his long-term bullish thesis, Hayes advises caution for immediate investment. He explicitly states that the optimal time to buy is after the Fed takes concrete action. "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, adding that a "wait-and-see" approach is prudent until policy changes are visible.
At the time of his publication, Bitcoin was trading around $66,200, down nearly 30% year-over-year and approximately 47% from its all-time high of $126,000 reached in October 2025. The broader market reaction to the Iran news was relatively muted, with U.S. stock futures opening only marginally lower and oil prices spiking early but erasing nearly half of their gains shortly after.