The ongoing conflict in Iran, combined with a strategic race in artificial intelligence (AI), might create the ideal conditions for Bitcoin to soar back to previous highs of $126,000. Arthur Hayes, the chief investment officer of Maelstrom, posits that escalating military and technological expenditures will likely drive significant fiat currency printing in both the United States and China, thereby enriching the cryptocurrency ecosystem.
Military and AI Spending: A Catalyst for Crypto Growth
In a recent analysis posted on Substack, Hayes outlined how the deeper involvement of nations in military spending, coupled with the urgent push for AI advancements, is redefining financial landscapes. This formula, which he describes as “political will meets financial will,” is expected to yield more fiat currency. Such inflationary pressures, driven by war and AI investments, may elevate Bitcoin's value significantly.
“With a rapid increase in yearly capital expenditures directed towards AI and electrification, there will be vastly more units of fiat tomorrow than today,” Hayes elaborated, indicating a favorable trend for cryptocurrency.
The Crypto Market’s Resilience
The cryptocurrency sector witnessed an impressive surge last year, reaching an all-time high market capitalization of $4.28 trillion in October. However, it encountered a downturn in late 2025. Despite this slump, market analysts are scrutinizing the potential for renewed upward momentum. Hayes confidently asserts that a resurgence towards $126,000 for Bitcoin is not just optimistic but a “foregone conclusion.”
Highlighting the transformative potential of the Iran conflict, he stated, “War is inflationary, and the Iran conflict is no exception. Military spending and a strategic pivot towards domestic infrastructure investment will inevitably necessitate more money printing.”
Bitcoin’s Competitive Edge
Bitcoin has shown promising resilience, trading within a range of $79,467 to $82,496 recently, reflecting an increase of more than 31% from its lows earlier this year. The cryptocurrency has outperformed gold and other risky assets, solidifying its position in a rapidly changing financial environment. Hayes predicts that the unfolding circumstances will accentuate Bitcoin’s upward trajectory, especially after overcoming the significant threshold of $90,000.
“As the crypto market gears up for this rally, I foresee a scenario where skeptics are left defenseless while Bitcoin's explosive growth takes center stage,” he emphasized.
With trillions of dollars and yuan potentially flooding into the economy, the impending financial landscape could dramatically reshape investments and long-term strategies for both institutional and individual investors.
As the situation continues to evolve, the intersection of international politics and technological competition will likely play a crucial role in steering cryptocurrency trends through 2026 and beyond.