The US Federal Reserve could ease its hawkish monetary policy to help finance the country’s conflict with Iran, which would boost crypto markets, says BitMEX co-founder Arthur Hayes.
Hayes said in a blog post on Monday that every US president since 1985 has launched military action in the Middle East, and each time, the Federal Reserve has responded by cutting rates and expanding the money supply to finance the conflict.
“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,” he added.
Hayes said that the Gulf War in 1990, the global war on terrorism after the Sept. 11 attacks in 2001, and the so-called “surge” in Afghanistan in 2009 had all resulted in Fed rate cuts or monetary easing.
Over the weekend, Israel and the US initiated a series of airstrikes on Iran that killed the country’s supreme leader, Ali Khamenei, which President Donald Trump has pledged to continue.
Hayes advises a wait-and-see approach
“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,” said Hayes. “The prudent action is to wait and see.”
“The time to back up the truck and buy Bitcoin and high-quality shitcoins […] is immediately after the Fed cuts rates and or prints money to support the government’s goals in Iran,” he added.
Hayes has recently shared other theories on how the Fed may approach monetary policy, and in the past three months has said the Fed would start quantitative easing due to a new liquidity tool called Reserve Management Purchases, or to alleviate the Japanese bond crisis, or because artificial intelligence will take jobs, leading to a credit crisis.
Related: Bitcoin traders eye Iran reactions as oil sparks US 5% inflation forecast
Futures show only a marginal drop
After the Israel-US strikes on Iran, crypto social media saw a spike in mentions of “World War 3” over the weekend, according to Santiment.
However, the mentions remain much lower than in June 2025 when Israel launched strikes on Iran’s nuclear and military sites, which escalated into a 12-day conflict.
Macro newsletter The Kobeissi Letter said, “This is not a futures open that is anywhere near WW3,” a reference to US stock futures, which opened down marginally in early trading on Monday.
Oil prices have already erased nearly half of their opening gap higher, and the S&P 500 is down less than 1%, it added.
Context
Current positioning around Market Analysis remains sensitive to primary-source updates, policy interpretation, and execution risk across major venues.
What To Watch
Key confirmation signals include sustained spot demand, funding stability, and whether price can hold reclaimed levels after headline-driven volatility.
If momentum weakens, traders will likely prioritize downside liquidity zones and risk-control positioning before adding new directional exposure.
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