Arthur Hayes Calls Market A ‘No Trade Zone’ Amid US-Iran Tensions – Maps Out Four War Outcomes For Bitcoin

• Arthur Hayes said markets are in a ‘no trade zone’ due to geopolitical tensions and structural shifts from artificial intelligence.
• According to him, Bitcoin may initially fall under stress before recovering with monetary easing in most scenarios.
• He reiterated that Bitcoin’s price is driven primarily by fiat liquidity rather than traditional valuation metrics.

Co-founder and former CEO of BitMEX, Arthur Hayes, said on Thursday that the market is currently in a ‘no trade zone’ and that he can see four ways the tensions in the Middle East can play out and what each path could mean for Bitcoin.

“It’s a no-trade zone,” he wrote in his Substack newsletter, adding that Maelstrom, where he’s currently chief investment officer, was only adding to its long position on Hyperliquid (HYPE).

Hayes said there were two reasons why the market was in a “trading dead zone.” One was the proliferation of agentic AI, and the other was the U.S. launching a “war of choice” against Iran. According to him, how the former will play out largely depends on what arrangements will prevail when it comes to the flow of goods and services through the Strait of Hormuz. 

Four Ways The US-Iran War Could End 

Hayes outlined four ways that the Middle East conflict could play out and how it would impact Bitcoin’s price. One was nuclear Armageddon, which would wipe out the world, and Bitcoin, or any other money market, is unlikely to be relevant.

Short of total annihilation, Hayes said either things could return to normal, or Iran could successfully restrict the flow of traffic through the Strait of Hormuz using its proposed Bitcoin toll – if the U.S. fails in its blockade. If both options fail, it’s also possible that the U.S. could strike again to disable Iran and any limitations on traffic following through the waterway. 

US-Iran War Outcomes And What They Could Mean For BTC

If the war ends and conditions stabilize, Hayes said the economy would still face pressure from AI-driven job losses and rising debt stress. For Bitcoin, this means its price may remain range-bound or only rise modestly until central banks begin injecting liquidity.

If Iran restricts oil flows and forces alternative payment systems, countries may sell U.S. assets, and global markets could weaken, initially causing Bitcoin to fall. However, even in this scenario, Hayes expects Bitcoin to recover once central banks step in with money printing.

On the other hand, if shipping routes are disrupted by a U.S. or Iranian blockade, uncertainty and volatility would likely pressure global markets. It could pressure Bitcoin in the short term, followed by a rebound driven by policy responses and increased liquidity.

Should the conflict escalate into a broader oil and geopolitical crisis, Bitcoin would likely drop sharply during the initial market panic but could surge later as governments print large amounts of money to stabilize the global economy.

Bitcoin's Price Needs Liquidity To Rise

Across all scenarios, Bitcoin tends to fall first during stress, then rise when money printing begins. “I believe the quantity of money determines the price of Bitcoin, not its price,” Hayes wrote. “Bitcoin has no cash flows, so the discount rate derived from central bank policy rates is irrelevant to valuing the magic internet money. But given Bitcoin’s fixed supply, its value in fiat terms depends on the total amount of fiat in existence.”

While Bitcoin (BTC) outperformed the S&P 500 after the initial breakout of the war, the stock market has corrected since and now leads BTC. Bitcoin’s price has gained more than 2% since February 28, and the S&P 500 is up nearly 3%. Gold, however, has lagged, down 5.5% since late February, while silver spot prices saw an even sharper drop of 11.5%. 

Bitcoin’s price held steady at around $74,300, edging just 0.4% lower in the last 24 hours, ahead of the jobless claims report slated for later in the day.  Meanwhile, the SPDR S&P 500 ETF Trust (SPY) moved 0.11% higher in pre-market trade. Both saw retail sentiment trending in ‘bullish’ territory over the past day on Stocktwits.

The SPDR Gold Shares ETF (GLD) moved 0.5% higher, and the iShares Silver Trust (SLV) moved 0.2% higher. Retail sentiment around GLD remained in the ‘bearish’ zone, while sentiment around SLV trended in ‘neutral’ territory over the past day.

Read also: XRP Pops, Bitcoin Pauses: What Crypto Traders Are Watching Before Jobless Claims

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