BitMEX founder Arthur Hayes has suggested that the ongoing conflict in the Middle East may have a positive impact on Bitcoin prices. According to Hayes, Iran’s involvement in Bitcoin mining could play a critical role in this scenario.
Iran’s Bitcoin Mining and Contribution to Hash Rate
In his analysis, Hayes explored how the conflict between Israel and Iran could influence the crypto market. He noted that Iranian miners contribute approximately 7% to the global hash rate, highlighting the potential significance of Iran’s mining sector. Hayes argued that potential attacks by Israel on Iran’s mining infrastructure wouldn’t necessarily drive BTC prices down. He referred to the 2021 crackdown on mining in China, where the hash rate quickly recovered, and Bitcoin even reached new all-time highs.
Oil Prices and Bitcoin Correlation
Hayes further suggested that if the conflict disrupts the oil infrastructure, oil prices could soar. This spike in energy prices could, in turn, boost Bitcoin. He emphasized that rising energy costs might lead to Bitcoin gaining value against fiat currencies, stating, “Bitcoin is energy stored in digital form. If energy prices rise, Bitcoin’s value against fiat currencies also increases.”
Mining Difficulty and Energy Costs
Hayes noted that higher energy prices might challenge some large-scale miners, but if the hash rate declines, mining difficulty would decrease. In such a scenario, new miners could still profit, despite higher energy costs.
He concluded by reinforcing Bitcoin’s resilience to economic fluctuations, particularly those driven by geopolitical events. Investors should consider how these dynamics could influence Bitcoin’s value, particularly in light of energy price volatility.
For further analysis on the intersection of geopolitics and cryptocurrency, visit Dey There.
Bitcoin, hash rate, oil prices, Bitcoin mining, energy costs
