Bitcoin as a safe haven? Arthur Hayes weighs in amid global unrest

• Arthur Hayes predicted Bitcoin would rise due to increased U.S. money printing amid international conflict.
• Bitcoin was trading at $67,862.17, with significant geopolitical concerns looming.

Bitcoin [BTC] was enjoying a bullish phase, trading at $67,862.17, at press time. BTC experienced an impressive 11% hike over the past week.

However, as geopolitical tensions escalate, concerns are mounting about inflation and heightened government spending, which could potentially push BTC back into a bearish trend.

Arthur Hayes remains optimistic

Despite these challenges, BitMEX co-founder Arthur Hayes remains optimistic, forecasting a significant upward movement for Bitcoin.

In a recent blog post, Hayes contended that the U.S. government’s financial maneuvers in response to conflicts in the Middle East are likely to lead to increased money printing, thereby igniting the next bullish rally for BTC’s price.

He said, 

“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.”

Concerns still prevails

Concerns remain for Bitcoin despite optimism, especially due to geopolitical conflicts impacting the crypto industry.

Bitcoin mining rigs represent some of the most valuable and essential physical assets in the cryptocurrency ecosystem, and the destructive nature of war poses significant risks to their operation.

However, Hayes pointed out 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 suggested neither side wants confrontation, which might mitigate the fallout for crypto.

He said, 

“According to some media outlets, Iran is the only country where Bitcoin mining has flourished. Iranian Bitcoin miners account for up to 7% of the global hash rate, depending on the source.”

Lessons for Bitcoin 

Drawing parallels with historical events, Arthur Hayes referenced the Arab oil embargo of 1973 and the Iranian revolution of 1979 to illustrate how hard assets like gold tend to thrive during energy crises and inflationary periods.

He posits that BTC, often dubbed “digital gold,” is likely to follow a similar trajectory in the current economic landscape.

However, Hayes also advised caution, warning traders to brace for potential volatility.

He emphasized that if the ongoing conflicts lead to further destabilization in global markets, the crypto sector could experience a significant drawdown. 

As expected, he concluded it best when he said, 

“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.” 

Thus, in conclusion, while geopolitical tensions may exert short-term effects, their influence could be tempered by evolving liquidity conditions.