Macro investor and former hedge fund manager James Lavish warned that markets may be assuming a quick resolution to the Iran conflict — an assumption that could be dangerously wrong. If the war drags on and sustains pressure on oil, Lavish says it could trigger a fresh inflation shock, revive stagflation fears and force a broad repricing across global markets.
That scenario would put the Federal Reserve in a bind: unable to raise rates aggressively without risking recession, yet unable to cut rates while inflation remains elevated. Lavish highlights why Bitcoin (BTC) has recently behaved differently from gold and equities, but cautions that in a true “correlation-to-one” panic Bitcoin’s relative resilience could break down. In a deeper market drawdown, he estimates Bitcoin could fall another 10%–20%, potentially revisiting the low $50,000s or high $40,000s.
Despite the near-term risk, Lavish is not bearish long term. He argues a war-driven sell-off wouldn’t destroy Bitcoin’s thesis and could create a major buying opportunity. He advises investors to avoid being overly levered or completely unexposed in a market dominated by war headlines, bond stress and shifting Fed expectations.
The interview also discusses safe-haven plays, energy markets, Treasury yields and money printing. Watch the full interview on our YouTube channel and don’t forget to subscribe!
This interview has been edited and condensed for clarity.