Arthur Hayes, the co-founder of the BitMEX derivatives exchange, published an essay attributing the crypto market rally to the costs associated with hawkish U.S. foreign policy and not spot Bitcoin ETF anticipation.

In an Oct. 24 essay titled The Periphery, Hayes attributed U.S. president Joe Biden’s open-ended commitment to supporting Israel’s war effort against Hamas to the recent surge in the crypto markets.

“Added to Ukraine’s tab, America’s military budget is set to truly explode,” Hayes said. “This will increase future government borrowing, and the sky’s the limit when it comes to the sums of capital a war can waste.”

Hayes said institutional investors already moved to sell off bonds and treasury bills in preparation for expanded U.S. military expenditure and will be seeking returns from new asset classes.

“If long-term U.S. Treasury bonds offer no safety for investors, then their money will seek out alternatives,” Hayes said. “Gold, and most importantly, Bitcoin, will begin rising on true fears of global wartime inflation.”

Hayes’ comments come after BTC surged 19.5% in seven days, with many pundits attributing the move to progress on BlackRock’s application for an exchange-traded fund (ETF) investing spot in Bitcoin. The combined capitalization of digital assets is up 12.6% over the same period.

Hayes noted that gold has been rallying since the conflict broke out in Gaza. Gold is up 8.6% since Oct. 4, last changing hands for $1,975 per ounce, according to Market Index.