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BitMEX co-founder Arthur Hayes published a new article on March 2 arguing that prolonged US military engagement with Iran will increase the likelihood that the Federal Reserve will cut interest rates and print more money, which will ultimately push Bitcoin higher.
His thesis was based on a four-decade pattern: every major US military campaign in the Middle East has been followed by monetary easing from the Federal Reserve, and Iran is no exception.
Wars and the Fed: A Recurring Pattern
in ” iOS Warfare“, Hayes provided a link to historical analysis US military operations In the Middle East and the subsequent monetary easing by the Federal Reserve. He noted that every US president since 1985 has launched missiles or all-out wars against Middle Eastern countries, and that the Federal Reserve has consistently lowered interest rates afterward.
Hayes cited three precedents. During the 1990 Gulf War under President George HW Bush, the Federal Reserve kept interest rates unchanged at its first post-war meeting, but indicated that easing would be likely if the conflict dragged on. The central bank cut interest rates at its meetings in November and December 1990, even as inflation driven by higher oil prices persisted.
After the attacks of September 11, 2001, the chairman of the Federal Reserve, Alan Greenspan, promised for an emergency cut of 50 basis points of the interest rate, citing downward pressures on the prices of assets and the need to restore economic confidence. Subsequent wars in Iraq and Afghanistan were accompanied by an extended cycle of monetary easing.
Under Obama’s troop surge in Afghanistan in 2009, interest rates were already at zero, and quantitative easing was underway, leaving limited room for further cuts.
Moving to the present, Hayes portrays Trump’s apparent endorsement of regime change in Iran as a continuation of the same pattern. He argued that Iranian regime change had been a goal shared by bipartisan US politicians since 1979, giving the Federal Reserve the political justification to ease monetary policy to finance the effort.
Hayes supported his argument with a chart showing that the % of the federal budget allocated to the Department of Veterans Affairs has grown to a multiple of total federal spending since 1985, with a drop in the Federal Reserve’s effective interest rates following large military commitments.
Wait for the discount
Despite his positive long-term outlook, Hayes advised caution in the short term. He recommended that investors wait until the Federal Reserve actually lowers interest rates or starts printing money before increasing their exposure to Bitcoin and select altcoins.
Hayes said we don’t know how long Trump’s interest in spending billions, if not trillions, of dollars to shape Iran policy to his liking will last. He added that the wisest thing to do is to wait and watch.
Bitcoin was trading at about $66,200 at press time, down about 30% year-on-year and about 47% below its high of $126,000 reached in October 2025. The currency has fallen for five straight months, with the cryptocurrency’s Fear and Greed Index remaining in the extreme fear zone.
