BitMEX co-founder Arthur Hayes said a prolonged conflict involving Iran could pressure the Federal Reserve to restart rate cuts and potentially expand monetary easing, a policy shift he believes would help support Bitcoin.
In his essay titled “iOS Warfare”, Hayes links major US military action in the Middle East with later changes in Fed policy. His core argument is built on a pattern he says has held since 1985: after significant US military operations in the region, the Fed has repeatedly moved in a looser direction. He expects the current situation could follow that path as well.
Historical cases tied military escalation to easier policy
Hayes points to several examples. During the Gulf War under President George H.W. Bush, the Fed initially kept rates unchanged, but indicated it could turn more accommodative if the conflict dragged on. Later that same year, in November and December, it cut rates despite inflation pressure tied to rising oil prices.
He also cites the response to the worst terrorist attack in US history, when then-Fed Chair Alan Greenspan delivered an emergency 50-basis-point cut to stabilize confidence as asset prices came under pressure. The wars in Afghanistan and Iraq that followed were accompanied by an extended period of monetary easing. By 2009, when the Obama administration announced a troop surge in Afghanistan, the Fed had already taken rates to zero and launched quantitative easing.
Hayes sees war costs and lower rates moving together
On the current backdrop, Hayes argues that Donald Trump’s support for removing Iran’s hardline regime continues a bipartisan US objective that dates back to 1979. In his view, that creates political cover for the Fed to loosen policy under the banner of national security and support for military action, while also helping finance large war-related spending at lower cost.
He adds that since 1985, the share of the federal budget allocated to the Department of Veterans Affairs has grown at twice the pace of overall federal spending. Hayes says that trend lines up with the long-term decline in the effective federal funds rate after major wars, reinforcing his view that war spending and monetary easing are structurally linked.
Bitcoin view stays bullish long term, but not immediately
Hayes is constructive on the long-term setup, but he is not calling for an immediate aggressive buy. His advice is to stay cautious in the short term and wait until the Fed actually cuts rates or resumes money printing before increasing exposure to Bitcoin and select other cryptocurrencies.
At the time of writing, Bitcoin was trading near $66,200. That is down nearly 47% from its all-time high of $126,000 reached in October 2025, and the asset has posted losses for five straight months. The Crypto Fear and Greed Index has also remained in the “Extreme Fear” zone for an extended period.