The US Federal Reserve may soften its hawkish monetary stance to help fund Washington’s conflict with Iran — a move that could benefit crypto markets — according to Arthur Hayes, co-founder of BitMEX.
In a blog post published Monday, Hayes argued that every US president since 1985 has initiated military action in the Middle East, with the Federal Reserve responding each time by cutting interest rates and expanding the money supply to help finance the effort.
“The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood that the Fed lowers the price and increases the quantity of money to support Pax Americana’s latest bout of Middle Eastern adventurism,” Hayes wrote.
He pointed to historical examples such as the Gulf War in 1990, the global war on terror following the Sept. 11, 2001 attacks, and the 2009 troop surge in Afghanistan, all of which he said coincided with rate cuts or broader monetary easing.
Over the weekend, Israel and the US carried out airstrikes on Iran that reportedly killed the country’s supreme leader, Ali Khamenei, with Donald Trump pledging to continue the campaign.
Hayes urges patience
Hayes cautioned investors against acting prematurely.
“We do not know how long Trump will remain interested in spending billions, if not trillions, of dollars reshaping Iran’s politics to his liking, nor how much geopolitical and financial market pain he can politically tolerate before he cuts and runs,” he wrote. “The prudent action is to wait and see.”
He added that the ideal moment to heavily accumulate Bitcoin and other high-quality crypto assets would be immediately after the Fed moves to cut rates or inject liquidity to support US objectives in Iran.
Arthur Hayes has floated several other theories in recent months about how the Federal Reserve might pivot on monetary policy. Over the past three months, he has suggested the Fed could resume quantitative easing through a new liquidity mechanism known as Reserve Management Purchases, respond to stress in Japan’s bond market, or ease policy if artificial intelligence-driven job losses trigger a broader credit crisis.
Futures show only a marginal decline
Following the joint Israel-US strikes on Iran, crypto-focused social media platforms recorded a surge in references to “World War 3” over the weekend, according to data from Santiment.
Even so, the volume of such mentions was significantly lower than in June 2025, when Israeli strikes on Iranian nuclear and military facilities escalated into a 12-day conflict.
Meanwhile, macro-focused newsletter The Kobeissi Letter downplayed the market reaction, noting that US stock futures opened only slightly lower in early Monday trading.
Oil prices have already pared nearly half of their initial gains, while the S&P 500 was down less than 1%, suggesting investors are not yet pricing in a worst-case geopolitical scenario.
