Arthur Hayes Predicts Stupendous Surge in Bitcoin Price as Geopolitical Tension Heightens

Arthur Hayes, BitMEX’s co-founder, has dropped another Bitcoin price prediction. This time, he predicted a “stupendous” pump in the premier asset’s price, citing favorable macroeconomics.

In a weekly blog update, Hayes stated that Bitcoin could be off for a notable bull cycle if certain scenarios play out in the ongoing geopolitical tension. For context, the Middle East war rumors escalated again after Israel bombarded north Gaza three days ago amidst an ongoing rift in Lebanon.

Hayes stated that Bitcoin could be a huge benefactor of the ongoing tension as Israel will run to the US for arms and missiles to fight Iran. Consequently, the US will borrow money to buy arms to support Israel’s military endeavors and end up printing more money.

Furthermore, the Federal Reserve will increase its balance sheet, favoring asset classes like Bitcoin. Notably, Bitcoin has outgrown increases in the Fed balance sheet by 25,000%, and Hayes expects the money printing approach to steer a spectacular surge in the asset’s price.

“We understand that the US government must borrow money to sell bombs to Israel. We know that the Fed and the US 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,” Hayes says.

Bitcoin Will Be Unaffected by War

Hayes further stated that the war would have no physical impediments for Bitcoin despite Iran being at the center of the rumored war. It bears mentioning that Iran’s Bitcoin miners provide 7% of the global hash rate.

For context, a hash rate is the total computing power used to mine or process transactions on the proof-of-work consensus, in this case, Bitcoin.

The BitMEX co-founder argued that even if the Iranian mining plants were wiped out, it wouldn’t affect Bitcoin’s price. He cited a historical event when Bitcoin mining was banned in China when, although the hashrate dropped to 63%, the largest cryptocurrency by market cap still surged to its previous all-time high at $69,000.

Hayes Calls for Caution

While calling bullish scenarios for Bitcoin, Hayes noted that the market could see intense volatility. He stated that Bitcoin may fall drastically if Israel attacks Iran’s oil vessels or launches nuclear weapons in the rift.

The BitMEX co-founder encouraged caution, noting he divested some of his funds when Iran threw missiles at Israel early this month. Notably, the market reacted negatively to that event, with Bitcoin dropping to $60,000.

“Just because Bitcoin will rise over time doesn’t mean there won’t be intense price volatility, nor does it mean every shitcoin will share in the glory. The name of the game is sizing positions appropriately,” Hayes added.