Analysis: If the US-Iran conflict continues for several months, war spending and debt expansion may benefit Bitcoin.

Macro strategist Mark Connors stated that if the conflict between the US and Iran continues for months, the increased fiscal spending, debt expansion, and declining interest rates resulting from the war could create a favorable environment for Bitcoin. This is because war typically requires financing through the issuance of more government bonds, which increases the supply of dollars in the financial system, thereby weakening the value of existing currencies and benefiting non-dollar assets such as Bitcoin. Since mid-2025, the annualized growth rate of US federal debt has been approximately 14%. If this trend continues, the debt size could continue to grow by about 15% year-on-year. This sustained debt expansion is essentially a form of "currency dilution," which has historically been beneficial to Bitcoin's performance. Since the US first launched its attack on Iran, the price of Bitcoin has risen by about 3.6%. As US government debt increases and it becomes more reliant on short-term Treasury financing, policymakers may be more inclined to lower interest rates to reduce the interest burden. In an environment of "declining interest rates + continued debt expansion," liquidity typically improves, which is precisely the macroeconomic backdrop against which Bitcoin has historically performed strongly. (CoinDesk)