Haciyev Reşit 
As the cryptocurrency market closely monitors geopolitical developments, a notable analysis came from BitMEX co-founder Arthur Hayes. Hayes argued that if the U.S. engages in a long-term military conflict with Iran, it could impact not only political balances but also global monetary policy. In his view, such a scenario could force the Federal Reserve (FED) to ease monetary policy to maintain economic stability, which could in turn put upward pressure on Bitcoin prices. In his article titled “iOS War” published on March 2, Hayes reminded readers that historically, after major U.S. operations in the Middle East, interest rate cuts and liquidity increases often followed. He stated that rising government spending and economic uncertainty during wartime tend to push central banks toward more supportive policies, creating a particularly positive environment for assets with limited supply.
Historical Connection Between War and FED Policy
According to Hayes, since 1985, following U.S. military operations in the Middle East, the FED has generally leaned toward loosening monetary policy. Key examples supporting this view include interest rate cuts during the 1990 Gulf War, emergency rate reductions led by Alan Greenspan after the September 11 attacks, and quantitative easing policies during Obama’s Afghanistan operations. Hayes notes that these measures were aimed at stabilizing the economy and supporting the financial system. He emphasizes that this recurring pattern is not coincidental: increased public spending and uncertainty during wartime encourage central banks to inject liquidity and ease financial conditions. An increased money supply translates into greater dollar liquidity in the market. Historically, such expansionary policies support risk assets and can create strong upward momentum for digital assets like Bitcoin, which have a limited supply.
Potential Impact on Bitcoin
Hayes suggests that if the FED lowers interest rates or expands the money supply, it would increase dollar liquidity in the market, creating a more favorable macro environment for Bitcoin. Increased liquidity makes it easier for investors to move into higher-risk assets, typically accelerating capital flows into stocks, commodities, and cryptocurrencies. Bitcoin, with its limited supply, can benefit from the “digital scarcity” narrative during periods of expansionary monetary policy and potentially outperform other assets. However, Hayes warns that this scenario does not mean an automatic or immediate price surge. Without a clear rate cut, balance sheet expansion, or explicit easing signal from the FED, markets are unlikely to price in aggressive upward moves. He stresses that investors should focus not only on geopolitical developments but also on concrete changes in central bank policy; otherwise, taking early positions could increase short-term volatility risk.
Caution in the Short Term
Although Hayes views the long-term picture positively, he emphasizes that investors should act cautiously in the short term. He notes that before the FED officially cuts rates or signals clear expansionary policy, markets may continue to experience sharp and directionless swings. Investors should monitor central bank policies, interest rate decisions, and liquidity conditions closely, rather than relying solely on geopolitical events. At the time of the report, Bitcoin was trading around $68,000. The leading cryptocurrency had lost roughly 30% year-to-date and was about 47% below its October 2025 peak of $126,000. The Crypto Fear & Greed Index, remaining in the “extreme fear” zone for five months, underscores the cautious market sentiment. This suggests that investor risk appetite is still limited and clear macro signals are needed for a strong recovery.
Conclusion
Arthur Hayes’ analysis highlights the strong relationship between geopolitical risks and monetary policy. Historical examples show that during wartime and crises, increased liquidity can provide a supportive foundation for limited-supply assets like Bitcoin over the long term. In this context, expansionary monetary policies could serve as a potential catalyst for the crypto market. However, in the short term, it is risky to expect a strong and sustainable rally without clear policy signals from the FED. Therefore, both geopolitical developments and FED interest rate and liquidity decisions will continue to be decisive factors for Bitcoin’s direction in the near future.
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