Bitcoin may be mispricing an Iran-war shock, warns hedge fund veteran

Former hedge fund manager James Lavish says markets may be assuming a quick resolution to the Iran conflict. If the war drags on and keeps oil prices elevated, he warns of a renewed inflation shock and stagflation fears, forcing the Federal Reserve into a “no-win” policy stance. It would be harder to raise rates without recession risk, but inflation could block aggressive cuts. Lavish links this macro risk to Bitcoin’s recent trading behavior. He argues Bitcoin has not fully moved like gold or equities, so its relative resilience may not last in a correlation-driven selloff. In a deeper drawdown scenario, Bitcoin could fall another 10%–20%, potentially revisiting the $50,000 area or even the $40,000–$45,000 range. He stresses that a sell-off would not necessarily break the long-term Bitcoin thesis. Traders are advised to avoid extreme leverage or being completely out of the market if headlines, bond stress, Treasury yields, and Fed expectations rapidly shift. The interview also discusses safe-haven dynamics, energy markets, and money-printing concerns as part of the transmission mechanism from geopolitics to risk assets.