Macro strategist Mark Connors warned that if the US-Iran dispute lasts for several months, war-related spending and rising debt could buoy Bitcoin. Connors noted that sustained conflict would widen deficits and potentially weigh on the dollar, creating a more favorable environment for non-dollar assets like Bitcoin. Connors, who leads Risk Dimensions, argued that looser liquidity and lower-for-longer rates historically underpin Bitcoin during times of macro distress.
He highlighted that federal debt is rising at a rapid pace, with projections of about 14% annual growth after mid-2025. If the trend persists, debt could rise roughly 15% year over year. Such dynamics could support Bitcoin’s price trajectory, with Bitcoin around $68,153.83. Bitcoin rose about 3.6% following the initial Iran strike, signaling how geopolitical risks can translate into crypto demand.
This dynamic unfolds amid the possibility that oil shocks could complicate inflation, though Connors also argued that a stagflation scenario could still benefit Bitcoin. Policy makers may prioritize financial stability and debt financing over inflation containment if the environment remains unsettled, a stance that could be supportive of non-dollar assets. Federal Reserve officials emphasize maintaining smooth functioning of the Treasury market; if debt issuance shifts toward shorter-term bills, rates could fall further. In a lower-rate, higher-debt environment, liquidity may improve, which Connors believes would be favorable for Bitcoin.
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