In a March 1 essay, BitMEX co-founder Arthur Hayes argued that the U.S. military escalation in Iran fits a four-decade pattern of American intervention in the Middle East that ultimately leads to Federal Reserve easing.<\/p>\n
According to Hayes, the longer the U.S. engages in this conflict, the higher the likelihood the Fed cuts rates or prints money to finance the war effort, a move he believes will drive the price of Bitcoin (BTC) higher.<\/p>\n
In his analysis, Hayes pointed<\/a> to the 1990 Gulf War, where FOMC minutes from August of that year noted that \u201cevents in the Middle East had greatly complicated the formulation of an effective monetary policy,\u201d leading to rate cuts later that year.<\/p>\n He also cited the Federal Reserve\u2019s emergency meeting after the September 11, 2001, attacks, where then-Chair Alan Greenspan cut rates by 50 basis points, explicitly pointing to a \u201cheightened degree of fear and uncertainty\u201d impacting asset prices.<\/p>\n The crypto market has already reacted to the unfolding geopolitical news, showcasing its role as the only financial market open during the weekend turmoil. Bitcoin, the most prominent asset in the sector, initially plummeted<\/a> from $66,000 to around $63,600 within minutes of the first reports of strikes on February 28.<\/p>\n However, the asset just as quickly reversed course, jumping<\/a> to $67,000 later that evening following reports of the death of Iranian Supreme Leader Ayatollah Ali Khamenei. At the time of writing, BTC was trading at around $66,800, slipping by less than 1% on the day and up 2.8% over the past week, although it remains down more than 20% across the last month.<\/p>\n While the immediate market reaction has been chaotic, Hayes is urging investors to look past the initial volatility and focus on the anticipated policy response. He noted that every U.S. president since 1985 has engaged militarily in the Middle East, and the financial fallout has consistently been managed with cheaper money.<\/p>\n For the former BitMEX CEO, the \u201csimple heuristic\u201d for Bitcoin\u2019s rise or fall is that the cost of \u201cnation-building\u201d invariably leads to monetary easing.<\/p>\n \u201cThe longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood the Fed lowers the price and increases the quantity of money to support Pax Americana\u2019s latest bout of Middle Eastern adventurism,\u201d he wrote.<\/p>\n Considering that Bitcoin has just suffered through its fifth consecutive month of losses, a streak not seen since 2018, with the asset shedding<\/a> nearly 15% in February, Hayes has provided a specific trading tactic for the current environment. Given the uncertainty over how long the U.S. will remain engaged and how much financial market pain it can tolerate, he advises a patient approach.<\/p>\n \u201cThe prudent action is to wait and see,\u201d said the crypto trader.<\/p>\n He also suggests that the optimal time to \u201cback up the truck and buy Bitcoin and high-quality shitcoins\u201d is not during the initial conflict but immediately after the Fed actually cuts rates or resumes money printing to support the government\u2019s objectives in Iran.<\/p>\n The post Arthur Hayes Explains How US-Iran Conflict Could Boost Bitcoin<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" In a March 1 essay, BitMEX co-founder Arthur Hayes argued that the U.S. military escalation in Iran fits a four-decade pattern of American intervention in the Middle East that ultimately leads to Federal Reserve easing. According to Hayes, the longer the U.S. engages in this conflict, the higher the likelihood the Fed cuts rates or […]<\/p>\n","protected":false},"author":0,"featured_media":138962,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-138961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/138961"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=138961"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/138961\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/138962"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=138961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=138961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=138961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Hayes Advises Waiting for the Fed Before Buying<\/h2>\n