Arthur Hayes: Bitcoin Boom Expected as Middle East Conflict Escalates

- Arthur Hayes, Former BitMEX CEO's Bitcoin Price Prediction - Impact of Energy Price Surge and Fiat Currency Inflation [Unblock Media] Arthur Hayes, the former CEO of BitMEX, has forecasted significant changes in the Bitcoin market due to geopolitical tensions in the Middle East, rising energy prices, and inflation in fiat currencies. First, heightened tensions in the Middle East are likely to cause a sharp increase in energy prices. Energy can act as one means of preserving the value of money. As energy prices rise and the value of fiat currencies declines, the attractiveness of digital assets like Bitcoin increases. Hayes likened this to "stored energy in digital form," indicating that the rise in energy prices would elevate Bitcoin's value in terms of fiat currency. Additionally, when central banks expand the money supply and issue new currency, a large amount of dollars floods the market. This can lead to inflation, characterized by a sustained rise in prices and a fall in the value of money. Under such circumstances, Bitcoin emerges as an asset that can somewhat defend against inflation due to its limited supply. The massive monetary supply expansion by the U.S. Federal Reserve in 2021 and 2022 triggered inflation, leading to a significant surge in Bitcoin prices. However, short-term volatility can be substantial. Geopolitical events in the Middle East cause abrupt impacts on the cryptocurrency market. For example, on October 1, 2024, right after Iran attacked Israel, Bitcoin dropped from $64,000 to about $60,000, a decline of roughly 4%. This was because investors moved towards safe-haven assets like gold due to the war. Nonetheless, Bitcoin recovered by 12% within nine days, reaching the $61,800 level again, and is now trading at $68,300. This reflects the long-term view of Bitcoin as a hedge against inflation. In conclusion, Hayes sees the geopolitical situation in the Middle East, rising energy prices, and central bank monetary policies as key factors driving the increased value of Bitcoin. Long-term, Bitcoin's value is expected to continue rising, potentially reaching up to $73,000 by the end of 2024.