Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, shared his vision of a possible scenario for the Bitcoin market. In his opinion, escalating tensions in the Middle East, particularly between the U.S. and Iran, could trigger a loosening of the monetary policy by the Federal Reserve (Fed). In such a case, Hayes believes the Fed would be forced to lower interest rates and increase the money supply, which would positively impact the crypto market.
This is reported by Finway
U.S. Military Spending and Its Impact on Fed Policy
In his blog, Arthur Hayes emphasized that historically significant military operations by the U.S. in the Middle East have been accompanied by a loosening of American regulatory policy. As an example, he cited conflicts from the Gulf War to the anti-terrorism campaigns following September 11, 2001, and the intensification of military actions in Afghanistan. According to Hayes, if the current administration of Donald Trump continues active military operations against Iran, it will put additional pressure on the U.S. budget.
“The longer Trump engages in the extraordinarily expensive state-building in Iran, the higher the likelihood that the Fed will lower rates and begin printing money to support another round of Middle Eastern adventurism under Pax Americana,” he wrote.
At the same time, the current reaction of financial markets remains subdued. Futures on U.S. stocks and oil show minor changes, while the S&P 500 index has lost about 1.5%. Experts from The Kobeissi Letter note that despite the information backdrop regarding a potential escalation of conflict, markets are not currently showing signs of panic.
Opportunities for Investors in Digital Assets
Arthur Hayes highlighted that a potential loosening of Fed policy could serve as a strong catalyst for the growth of cryptocurrencies, particularly Bitcoin. He advised investors to exercise caution and closely monitor signals regarding rate cuts or the initiation of additional liquidity support measures.
According to Hayes, the moment of announcement regarding new Fed measures could be the optimal entry point for investments in Bitcoin and other risky digital assets. He had previously noted that a return to quantitative easing policy is possible due to various factors, ranging from instability in the bond market to technological challenges associated with artificial intelligence.
It is worth noting that in February 2026, Bitcoin experienced a decline of 14.94%. Ethereum, during the same period, dropped by 19.81%, marking its sixth consecutive month in the “red zone” since September 2025.
Thus, a potential easing of the Fed’s monetary policy remains one of the key factors for the future dynamics of the crypto market; however, decisions regarding this will depend on the development of the geopolitical situation in the region.
