Arthur Hayes, co-founder of BitMEX, believes Bitcoin could climb to as high as $750,000 by the end of 2026.
In an interview, Hayes argued that rising tensions in the Middle East could ultimately ignite the next major crypto rally. His thesis centers on how the Federal Reserve historically responds to expensive, prolonged conflicts.
Hayes projects Bitcoin could trade between $500,000 and $750,000 at the end of 2026. The foundation of that forecast is monetary easing. In his view, large-scale military engagements strain public finances, and that fiscal pressure frequently leads policymakers to cut interest rates and expand liquidity.
Key Points
- Hayes forecasts Bitcoin could reach $500,000–$750,000 by the end of 2026.
- He believes prolonged conflict involving Iran would strain U.S. finances and force the Federal Reserve to cut rates.
- His thesis hinges on war-driven fiscal expansion leading to monetary easing and liquidity growth.
- Hayes argues that Bitcoin and select altcoins would benefit immediately after policy easing begins.
- Bitcoin is currently trading near $68,000, well below its prior $126,000 peak.
War Spending and Monetary Policy
To support his outlook, Hayes points to what he sees as a recurring macroeconomic pattern. When federal spending surges during overseas conflicts, domestic economic stress intensifies. Policymakers then face mounting pressure to stabilize financial markets and sustain growth.
In a recent Substack post, Hayes wrote that investors may find a significant opportunity once the Fed begins lowering rates or increasing the money supply. Specifically, he suggested that Bitcoin and select high-quality altcoins, including HYPE, could benefit in such an environment. The key inflection point, he indicated, would occur immediately after monetary easing begins.
Hayes further contends that prolonged US involvement in Iran would increase the likelihood of rate reductions. Referring to President Donald Trump, he argued that extended nation-building efforts would amplify fiscal burdens. As those costs mount, he expects policymakers to cut borrowing costs and inject additional liquidity into the financial system.
According to Hayes, this sequence—war-driven spending followed by monetary accommodation—has repeatedly lifted asset prices. Bitcoin, he believes, would be no exception.
Market Backdrop and Prior Forecasts
Hayes’ latest projection comes at a time when Bitcoin’s price has stalled near $68,000, roughly half its October peak of $126,000. The pause contrasts sharply with recent gains in traditional safe-haven assets.
Gold and oil prices rose following US and Israeli strikes on Iran that killed Supreme Leader Ali Khamenei. The escalation unsettled global markets and heightened volatility. Yet Bitcoin has not mirrored the surge seen in commodities, underscoring the gap between Hayes’s bullish long-term outlook and current market behavior.
Earlier, in December, Hayes predicted Bitcoin would reach $200,000 by March 2026. His projections often diverge from the broader market consensus. He has also argued that disruption driven by artificial intelligence could ultimately strengthen, rather than undermine, Bitcoin’s long-term value proposition.
Lessons From Past Conflicts
To reinforce his thesis, Hayes draws on the Federal Reserve’s historical responses to geopolitical crises. During the 1990 Gulf War, members of the Federal Open Market Committee (FOMC) cited heightened uncertainty stemming from Middle East tensions. By late 1990, the Fed had lowered interest rates as confidence deteriorated.
A similar dynamic unfolded after the September 11 attacks in 2001. At the time, FOMC Chair Alan Greenspan proposed a 50-basis-point emergency rate cut, which the central bank implemented shortly thereafter. Markets stabilized soon after the intervention.
By linking those episodes to current developments, Hayes outlines what he sees as a familiar macro cycle: major military operations demand hundreds of billions, or even trillions, of dollars in spending. As fiscal pressure mounts, monetary policy shifts toward easier conditions.
In Hayes’ assessment, that pivot creates fertile ground for risk assets. If history repeats, he believes Bitcoin could be positioned for a substantial rally in the years ahead.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.