Arthur Hayes' quote revalidated: Why are Middle East conflicts often a good opportunity to go long on Bitcoin?

March 3, 2026, the Middle East is shrouded in war clouds. As the US-Iran conflict continues to escalate, the crypto market experiences intense volatility. BitMEX co-founder Arthur Hayes recently stated: “The longer the U.S. intervenes in Iran, the more likely the Federal Reserve will cut rates or print money to support the war effort, which will drive up Bitcoin prices.” This view tightly links geopolitics, macro policy, and crypto assets, sparking widespread discussion in the market. Based on Gate market data, this article attempts to strip away emotions and noise, conducting structured validation and in-depth analysis of this hypothesis.

War and Easing: An Overview of a Historical Pattern

Arthur Hayes’s core logic is built on a clear causal chain: prolonged war → surge in fiscal spending → increased economic uncertainty → Fed forced to loosen monetary policy (cut rates / QE) → excess dollar liquidity → rising prices of scarce assets like Bitcoin.

In his view, this is not just a theoretical exercise but a reflection of the past forty years of history. War brings not only geopolitical rifts but also shifts in monetary policy. When traditional “safe-haven narratives” (gold, USD) conflict with “risk narratives” (Bitcoin, US stocks), the underlying driver of asset prices is the central bank’s balance sheet.

From 1990 to Present: US Military Actions in the Middle East and Fed Policy Timeline

Historically, major US military actions in the Middle East have often coincided with shifts in monetary policy:

• 1990 Gulf War: President George H. W. Bush launched “Desert Storm.” The Fed cut interest rates consecutively in November and December to counteract economic weakness caused by the war.
• 2001 Afghanistan War (War on Terror): After 9/11, Fed Chair Greenspan announced a 50 basis point rate cut in an emergency meeting, initiating a prolonged easing cycle.
• 2009 Troop Surge in Afghanistan: Although rates had already fallen to zero, the Fed used quantitative easing (QE) to provide ample cheap funds for the war machine.
• 2026 US-Iran Conflict (current): The Trump administration launched military operations against Iran at the end of January, with the conflict ongoing.

Data and Structural Analysis: Market Immediate Reactions

As of March 3, 2026, Gate market data shows BTC/USDT at a latest price of $70,000, up 4.84% in 24 hours. This price movement occurs amid escalating US-Iran tensions.

However, short-term structural analysis indicates that market sentiment is not simply “war is bullish.” In late February, during the initial outbreak of conflict, Bitcoin briefly dipped to around $63,000. This is similar to some past moments: on the day Russia-Ukraine war broke out in 2022, Bitcoin plunged over 9%; during the outbreak of the Israel-Palestine conflict in 2023, Bitcoin oscillated downward over several days.

Data reveals a complex structure: at the onset of war, Bitcoin often exhibits “risk asset” characteristics, pressured alongside US stocks. But if we extend the timeline to monthly intervals, as Fed policies become clearer, Bitcoin again shows its “liquidity-sensitive asset” traits in the later cycle.

Public Sentiment Breakdown: Bulls vs. Bears

Currently, market views on “war and Bitcoin” are sharply divided into two main camps:

• Bullish (following Hayes’s easing logic): Believes that the longer the war lasts, the higher the fiscal costs, and the more the Fed will turn to easing policies for political cover. Hayes himself advises investors to “wait for signals,” i.e., to increase holdings only after the Fed clearly cuts rates or initiates new easing, rather than blindly entering at the start of hostilities.
• Bearish (based on inflation and safe-haven squeeze logic): As Anthony Pompliano and others argue, if oil prices spike above $100 due to Strait of Hormuz disruptions, it could trigger severe inflation, forcing interest rates “higher for longer,” which would depress Bitcoin valuation. Additionally, some analyses suggest that in extreme geopolitical conflicts, capital’s first response is to flock into gold and US Treasuries, temporarily sidelining Bitcoin’s “digital gold” safe-haven role.

Narrative Validity: “Digital Gold” or “Liquidity Expectation”?

Hayes’s argument reveals a key shift: Bitcoin is transitioning from a “safe-haven asset” to a “liquidity expectation asset” narrative.

It’s crucial to distinguish facts from opinions. The facts are: historically, US involvement in Middle East wars has indeed led to monetary easing tendencies. The facts also show that during the initial outbreak of the US-Iran conflict, Bitcoin did decline, demonstrating its short-term lack of safe-haven function.

Hayes’s view is that this initial decline is not important; what matters is that it forces the Fed to react in the future. His speculation is that as long as the war persists, the Fed will inevitably loosen monetary policy to hedge fiscal pressures and market shocks. This logic is based on “government budget constraints” and “central bank political attributes,” rather than any technical or on-chain data of Bitcoin itself.

Multi-Scenario Evolution and Projection

Based on the current US-Iran situation, Bitcoin’s future price path could follow three scenarios:

• Scenario 1: Short-term de-escalation (neutral to bearish). If diplomacy succeeds and hostilities quickly subside, oil prices fall, and risk sentiment diminishes. The Fed maintains its tightening or wait-and-see stance, not providing new easing expectations. Bitcoin may unwind some “war premium,” oscillating back to $60,000–$65,000.
• Scenario 2: Prolonged conflict but not out of control (Hayes’s baseline bullish scenario). The war continues for months, US fiscal spending increases significantly, economic data weakens, and markets become volatile. Under political and economic pressure, the Fed signals rate cuts or pause in balance sheet reduction in late 2026. Bitcoin, driven by easing expectations, could break previous highs and start a new upward cycle.
• Scenario 3: Out-of-control conflict, full regional war (extreme volatility, initial drop then rise). If hostilities extend to the Strait of Hormuz, disrupting oil supplies and pushing prices above $100, global stagflation fears will surge, leading to indiscriminate sell-offs of all risk assets (including Bitcoin) for liquidity. After panic subsides, if the Fed implements massive easing, Bitcoin could rebound sharply after a steep decline.

Conclusion

Hayes’s famous saying “Middle East war is a good buying opportunity” does not mean blindly going long at the outbreak of hostilities. Instead, it reflects a deep understanding of the “war-fiscal-monetary” linkage and an early positioning for future liquidity shifts.

For investors, the key is not the front-line conflict but the Fed’s dot plot and balance sheet. In this geopolitical test of 2026, Bitcoin demonstrates remarkable sensitivity to macro liquidity but also exposes its vulnerability as a “risk asset.” Before betting on “war benefits Bitcoin,” we must carefully consider: will this time rewrite the script of history? The answer may lie in upcoming CPI data and FOMC statements in the coming months.