Key Points
- Bitcoin’s price may rise due to increased U.S. money printing amid geopolitical conflicts, predicts BitMEX co-founder Arthur Hayes.
- Despite optimism, concerns over the impact of geopolitical conflicts on the crypto industry still persist.
Despite the recent bullish phase for Bitcoin (BTC), trading at $67,862.17, the escalating geopolitical tensions and concerns about inflation and government spending could potentially push BTC back into a bearish trend.
Arthur Hayes’s Bitcoin Forecast
Arthur Hayes, BitMEX co-founder, remains optimistic about Bitcoin’s future. He suggests in a blog post that the U.S. government’s financial responses to conflicts in the Middle East may lead to increased money printing, igniting the next bullish rally for BTC.
Hayes stated, “We know that war is inflationary. We understand that the U.S. government must borrow money to sell bombs to Israel.” He added, “We know that the Fed and the U.S. commercial banking system will buy this debt by printing money and growing their balance sheets. Therefore, we know that Bitcoin will rise stupendously in fiat terms as the war intensifies.”
Geopolitical Conflicts and Bitcoin
Despite Hayes’s optimism, concerns remain for Bitcoin due to the impact of geopolitical conflicts on the crypto industry. Bitcoin mining rigs, some of the most valuable and essential physical assets in the cryptocurrency ecosystem, face significant risks due to the destructive nature of war.
However, Hayes suggests that the current Israel-Iran conflict is largely a proxy war, involving the U.S. and EU on one side and China and Russia on the other. He believes neither side wants confrontation, which might reduce the impact on crypto.
Hayes also drew parallels between historical events and Bitcoin’s potential trajectory. He referenced the Arab oil embargo of 1973 and the Iranian revolution of 1979, illustrating how hard assets like gold tend to thrive during energy crises and inflationary periods. He suggests that BTC, often dubbed “digital gold,” is likely to follow a similar trajectory in the current economic landscape.
However, he also warns traders to prepare for potential volatility, emphasizing that if ongoing conflicts lead to further global market destabilization, the crypto sector could experience a significant drawdown.
He concluded by advising, “The best thing to do is to get yourself and your family out of harm’s way and then shepherd your capital into a vehicle that outperforms fiat debasement and maintains its energy-purchasing power.”