According to macro strategist Mark Connors, Bitcoin (BTC), currently valued at $68,774.38, could see an uptick if a potential conflict between the U.S. and Iran persists for an extended period. He suggests that increased government expenditure, escalating debt levels, and declining interest rates create an environment historically favorable for cryptocurrencies.
Connors, who previously led research at 3iQ and served as the global head of portfolio and risk advisory at Credit Suisse, noted that wars are costly endeavors typically financed through additional government debt issuance. This influx of new dollars into the economy tends to dilute the value of existing currency in circulation while benefiting assets not tied to the dollar like Bitcoin.
“Liquidity is what drives Bitcoin,” Connors stated during a conversation with CoinDesk. He anticipates that if military operations continue over several months, deficit spending will likely increase as funding for these activities ramps up. “A prolonged conflict means heightened expenditures and greater deficits—this bodes well for Bitcoin,” he added.
The U.S.’s national debt has been rising sharply; Connors pointed out that since mid-2025 it has surged by approximately 14% annually. If this trajectory holds steady, we might witness a year-over-year increase of around 15% in national debt levels.
“This is essentially debasement,” he remarked.
On Monday, Bitcoin seemed to mirror these trends as it experienced a rally overnight into the morning hours in America when investors began reallocating funds away from stocks due to concerns about a drawn-out conflict with Iran; since then it has appreciated by 3.6% following initial military actions against Iran.
However, Connors cautioned that surging oil prices driven by war could complicate matters further by pushing inflation upward. Nevertheless, he believes even within a stagflation scenario—characterized by stagnant growth alongside rising prices—Bitcoin may still thrive.
In such circumstances where policymakers focus on financial stability and governmental financing rather than solely combating inflation could be beneficial for cryptocurrency markets
Connors emphasized that beyond its traditional objectives of maintaining stable prices and maximizing employment opportunities—the Federal Reserve operates under an implicit mandate aimed at ensuring smooth functioning within financial markets including Treasury operations specifically.
The authorities cannot afford disruptions similar to those witnessed during the repo market crisis in 2019 or recent regional bank failures occurring after aggressive rate hikes earlier this year,” he explained further emphasizing his point on market stability requirements from regulators’ perspectives
“The Fed must ensure proper functioning within Treasury markets,” said Connors succinctly summarizing regulatory priorities ahead going forward
This necessity may steer policymakers towards lower interest rates over time particularly given current shifts toward issuing more short-term treasury bills instead long-term bonds while also considering potential changes should Kevin Walsh—a candidate favored partly due his dovish outlook —become chairperson upon Senate confirmation later this May .
A larger proportion rolling off quickly would enable reduced costs associated servicing existing debts thus providing immediate relief on fiscal fronts overall enhancing liquidity conditions which according Connor’s assessment presents ideal backdrop conducive towards bitcoin performance moving forward
<P“When interest rates decline concurrently alongside expanding deficits ,that creates perfect storm supporting bullish sentiment surrounding bitcoin ”he concluded optimistically.”