Bitcoin swung sharply—about 8%—in just hours following the recent strikes in Iran, dropping from around $68,000 to $63,000 before rebounding back near $68,000 after reports concerning Ayatollah Ali Khamenei.
Despite the intraday volatility, Bitcoin is on track for its fifth straight monthly loss, marking its longest losing streak since 2018. February alone saw a decline of roughly 14–15%, leaving BTC nearly 48% below its all-time high of $126,000.
Arthur Hayes, co-founder of BitMEX, published an analysis suggesting a historical link between U.S. military campaigns in the Middle East and Federal Reserve monetary easing. According to Hayes, prolonged U.S. involvement in conflicts like the one in Iran often leads to rate cuts or increased money supply, which could eventually support Bitcoin prices.
He referenced examples such as the 1990 Gulf War and the Fed’s emergency rate cut after the September 11, 2001 attacks, highlighting a pattern where geopolitical crises prompted monetary easing. Hayes argues that ongoing U.S. actions in Iran could follow a similar trajectory, boosting the likelihood of Fed rate cuts or renewed quantitative easing.
Hayes cautioned traders to be patient. He suggested scaling into Bitcoin only after clear Fed action—like rate reductions or new QE—rather than trying to trade during periods of immediate geopolitical stress. The idea is that buying during early conflict periods carries high risk, while monetary easing afterward could create better entry points for investors.
In short, Bitcoin remains volatile due to geopolitical events, and historical patterns suggest that longer U.S. engagement in the Middle East might eventually spur Fed policies that could support the crypto market.
