BitMEX co-founder Arthur Hayes has released a provocative new essay titled 'iOS Warfare', claiming that ongoing U.S. military actions in Iran could trigger a massive crypto rally. His core thesis is straightforward: modern warfare is extremely expensive, and to cover costs, the Federal Reserve will eventually be forced to print money and lower interest rates. That flood of liquidity, Hayes argues, is exactly what risk assets need to surge.
War Spending Meets Liquidity Injection
Bitcoin is currently trading near $68,179, up 7.69% over the past week, but still well below its all-time high from October 2025. Hayes predicts that as government spending on the 'war machine' expands, the growing money supply could push Bitcoin toward a long-term target of $500,000 to $750,000.
Historical Precedents: Fed Easing During Middle East Conflicts
Hayes bases his prediction on four decades of historical patterns, citing three major events:
- 1990 Gulf War: The Fed prepared to cut rates even as oil prices drove inflation, eventually lowering them in late 1990.
- 9/11 Attacks (2001): Chairman Alan Greenspan slashed rates by 50 basis points to stabilize markets.
- 2003 Iraq War: The Fed had already dropped rates to zero and launched quantitative easing, flooding the system with cash.
Hayes believes the current focus on Iran follows the same path, giving the Fed 'political cover' to make money cheaper under the guise of national security.
What to Watch Next
The immediate success of Hayes' thesis depends on the Fed's March 17–18 meeting. Some big players are already betting: Strategy purchased 3,015 BTC even as airstrikes dominated headlines. However, Hayes himself recommends a 'wait and see' approach, urging investors to wait for concrete proof of rate cuts or new money printing before adding heavy positions. If the Fed stays hawkish, Bitcoin may remain stuck below $70,000; a dovish shift could ignite the rally he expects.
Cryptocurrency investing carries high risk. This article is for informational purposes only.