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Arthur Hayes was wrong before. In December, the BitMEX co-founder predicted Bitcoin would hit $200,000 by March 2026. It didn’t. Bitcoin is trading near $71,000. Hayes is now calling for $500,000 to $750,000 by the end of the year, and his reasoning runs straight through the Middle East.
Hayes argues that a prolonged US military conflict involving Iran would put severe pressure on federal finances. As government spending climbs, he believes policymakers would face little choice but to cut interest rates and pump more money into the financial system. That combination — loose monetary policy and expanding liquidity — is what he thinks sends Bitcoin sharply higher.
The argument is grounded in history, at least partially. During the 1990 Gulf War, Federal Open Market Committee members openly cited Middle East instability as a factor in their deliberations.
By late 1990, the Fed had cut rates as economic confidence dropped. After the September 11 attacks in 2001, then-Fed Chair Alan Greenspan pushed for an emergency 50-basis-point cut, which was implemented almost immediately. Markets steadied shortly after.
Hayes draws a direct line from those episodes to what he sees unfolding now. Large military operations cost hundreds of billions. Fiscal pressure builds. The Fed eventually eases. Risk assets, including Bitcoin, rise.
He made this case publicly in a Substack post, where he wrote that investors could find a meaningful entry point once the Fed begins cutting rates or expanding the money supply.
He named Bitcoin and a handful of what he called high-quality altcoins as the assets best positioned to benefit once that shift begins.
The key moment, in his view, is not the conflict itself but what comes after. Rate cuts and fresh liquidity, he argues, are what actually move prices.
Bitcoin’s current price tells a different story from Hayes’ projections. The coin sits roughly half its October peak of $126,000. While gold and oil climbed after US and Israeli strikes killed Iranian Supreme Leader Ali Khamenei, Bitcoin did not follow. It sold off initially before recovering to current levels.
That disconnect — commodities rallying while Bitcoin lags — has not shaken Hayes’ outlook. His $500,000 to $750,000 call remains intact, pinned to the belief that monetary policy, not headlines, is what ultimately drives the price. Whether the Fed moves in that direction depends on how long and how costly the conflict becomes.
