Bitcoins and Breezes: A Wall Street Fable

Now, folks, when the drums of war begin to beat, most run for the hills – or, in these modern times, for gold and land. Seems natural enough, doesn’t it? Something you can hold in your hand, something the government can’t conjure up with a few strokes of a pen. But this newfangled Bitcoin… well, that’s a different kettle of fish altogether.

There’s a fellow named Arthur Hayes, a sharp operator in the crypto game, who’s taking a contrarian view. Most expect a bit of a run-up in Bitcoin with all the fuss overseas, but Hayes ain’t buying. Says he wouldn’t touch it with a ten-foot pole right now, and that’s saying something, considering the fella’s made a good penny on the thing in the past. He shared this on a podcast, the Coin Stories, and it got me to thinking.

Seems the common wisdom about war being good for Bitcoin is a bit… optimistic. Now, Hayes isn’t saying war is bad for Bitcoin, mind you. He’s saying it’s the money printing that often follows a conflict that gives the coin a lift. He reckons he’ll start buying again when the Federal Reserve fires up the printing presses, and the longer this trouble drags on, the more likely we are to see a tumble in both Bitcoin and stocks. A curious notion, wouldn’t you agree?

It all comes down to liquidity, you see. When the government starts handing out money like it’s going out of style, folks look for places to put it. And lately, Bitcoin’s been a popular choice. It’s tracked this pattern with a regularity that’d make a clockmaker envious. Bull markets in Bitcoin have often followed periods of expanding money supplies, though with a bit of a lag, like a stagecoach behind schedule.

But here’s the rub. The Fed isn’t exactly eager to loosen the purse strings right now. Prices are creeping up, and the possibility of an energy shock, with all that trouble in the Strait of Hormuz, is enough to make a man sweat. If oil prices keep climbing, we could see inflation well above the Fed’s target by the end of the year. That means interest rate cuts are less likely, and that throws a wrench in Hayes’s theory. A fella can’t rely on a printing press signal if the presses are staying silent, can he?

So, those waiting for the government to flood the market with money might be waiting a long while. And they might miss out on some gains in the process. It’s a bit like waiting for a train that ain’t coming.

Don’t Tie Yourself to a Theory

Now, I’m not suggesting you follow Arthur Hayes’s lead to the letter. It’s best to take a longer view, as a wise man once told me. Whether the Fed loosens policy this year or not, Bitcoin’s supply will continue to dwindle. Only about 450 new coins enter the market each day, and that number will be cut in half in a few years. That means there’ll be fewer and fewer coins available, and future buyers will have to compete for a smaller pie. Scarcity, my friends, is a powerful thing.

Hayes might be right about the optimal conditions for a Bitcoin rally arriving after the Fed cuts rates. But most investors don’t have the luxury of waiting for a perfect signal. A more practical approach is to build a position gradually, buying a little at a time, regardless of the price, and then holding on for years. That way, you can capture the long-term benefits of scarcity. And that’s what I intend to do.

War doesn’t make Bitcoin a buy, but its scarcity does. And scarcity doesn’t need permission from the Federal Reserve to pay off, though a little help from the government never hurt anyone. It’s a simple truth, really, as plain as the nose on your face.

2026-03-19 13:02

Don’t Tie Yourself to a Theory

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