Bitcoin expected to rise with oil and energy prices

-

Arthur Hayes predicts that Bitcoin’s price will increase if tensions between Iran and Israel escalate and lead to rising oil and energy prices.

In a blog post, the founder of the BitMEX exchange explained that if major oil and natural gas fields were attacked during a conflict, it would cause oil prices to spike.

Bitcoin is a global safe haven?

Hayes shared that such a scenario would push all energy prices higher as countries short on oil would need to find alternative energy sources to keep their economies running.

“What happens to the fiat price of Bitcoin? It pumps.”

He explained that Bitcoin acts as stored energy in digital form, meaning that if energy prices rise, Bitcoin’s value in fiat currency will also increase.

Although mining profitability may change with fluctuations in the hashrate, Hayes mentioned that if the hashrate drops, mining difficulty would also decrease.

This adjustment would allow new miners to profitably mine Bitcoin even at higher energy prices, as this is a self-balancing method.

Gold skyrocketed along with the oil price, and this could happen again with Bitcoin

To support his argument, Hayes referenced historical data showing big gains in commodities during the oil crises from 1973 to 1982, which were triggered by the Arab oil embargo and the Iranian revolution.

During this time, oil prices skyrocketed by 412%, while gold rose by 380%, closely following oil’s increase.

While Bitcoin didn’t exist during those crises, it has shown some correlation with commodities during times of inflation.

Speculative scenarios

Hayes suggested that if Middle Eastern oil were to be removed from the market, the Bitcoin blockchain would continue to operate normally.

He believes that Bitcoin’s price would at least maintain its value against energy and likely rise in terms of fiat currency.

This week, oil prices have dropped slightly, with West Texas Intermediate falling about 3.7% since Monday to $71.09 per barrel as of October 17.

On the other hand, Bitcoin gained over 8% this week, reaching above $68,000 for the first time since late July on October 18.

Gold also reached an all-time high this week, hitting $2,711 per ounce on October 17. This jump comes as investors seek safe-haven assets due to uncertainty surrounding the upcoming U.S. election and increasing tensions in the Middle East.

Have you read it yet? High-risk crypto loans reach two-year peak

LATEST POSTS

The Crypto Fear and Greed Index says HODL?

The crypto market’s been doing its usual dance, up, down, sideways. Annoying, but it is, what it is. The big headline? The Crypto Fear and...

The so-called Bitcoin treasury strategy is a ticking bomb?

The Bitcoin treasury game is been the hot ticket for a while. But now? The big boss, crypto analyst James Check, is telling us straight,...

Russia’s Rostec rolls out RUBx, a ruble-backed stablecoin on TRON

Russia’s defense and tech giant, Rostec, is stepping into the crypto ring with a new player. Meet RUBx, a stablecoin pegged one-to-one with the Russian...

The Brazilian job, or how to buy $140 million cash for $2,700?

Brazil just got hit with one of the nastiest cyber heists in its history. We’re talkin’ about a cool $140 million gone in the blink...

Most Popular

Guest posts