Arthur Hayes: “If Middle East involvement drags on, the Fed may ease… favorable for Bitcoin”

Arthur Hayes, co-founder of BitMEX, discussed the link between the Middle East situation and US monetary policy, saying it could have a positive long-term impact on Bitcoin (BTC).

On the 1st (local time), Hayes wrote in a Substack post that “if US involvement in the Iran situation becomes prolonged, expanded fiscal spending will be unavoidable, and to support it the Federal Reserve (Fed) is likely to move toward rate cuts or monetary expansion,” adding that “in that case, increased liquidity could support risk assets—especially Bitcoin prices.”

However, Hayes noted that for now it is unclear how long US involvement will last and how large the costs will be. He also said it is difficult to prejudge how much geopolitical shock and financial-market volatility the US can endure.

He added, “I will only begin allocating positions in earnest after confirming a material shift in Fed policy,” and “for now I will maintain a wait-and-see stance.”

In the market, uncertainty over the policy path is rising as Middle East geopolitical risks, higher international oil prices, and the possibility of renewed inflationary pressure intersect.