Arthur Hayes outlines potential conflict scenarios affecting Bitcoin

Arthur Hayes, former CEO of BitMEX, predicts a surge in Bitcoin (CRYPTO:BTC) prices driven by escalating tensions in the Middle East and rising inflation. 

Hayes argues that the growing conflict between Israel and Iran, along with increasing energy costs, could boost Bitcoin's value as governments inject newly printed dollars into markets to fund military actions. 

In his analysis shared on Wednesday, Hayes noted that while the physical infrastructure supporting Bitcoin is unlikely to be affected, the impact of rising energy prices and inflation will be significant. 

He explained, "Bitcoin is stored energy in digital form. Therefore, if energy prices rise, Bitcoin will be worth more in terms of fiat currency." 

Hayes pointed out that inflationary monetary policies, where governments borrow to finance military activities, would further strengthen Bitcoin's value over time. 

He stated, “We know that war is inflationary. The U.S. government must borrow money to sell bombs to Israel. The Federal Reserve and commercial banks will buy this debt by printing money. As a result, Bitcoin will rise in fiat terms as the conflict intensifies.”

While optimistic about Bitcoin’s potential rise, Hayes also cautioned about volatility in the broader crypto market, especially for smaller cryptocurrencies. 

He advised investors to approach the market carefully and manage their positions wisely, saying, "Just because Bitcoin will rise over time doesn’t mean there won’t be intense price volatility, nor does it mean every altcoin will share in the glory."

At the time of writing, the Bitcoin (BTC) price was $67,590.61.