Arthur Hayes: Bitcoin Set to Pump If Oil and Energy Costs Soar Due to Iran-Israel Crisis

Arthur Hayes, the co-founder of BitMEX, believes Bitcoin could surge if tensions between Iran and Israel escalate.In a recent blog post, Hayes explained how rising oil prices could drive Bitcoin's value higher.

This prediction comes as energy markets and Bitcoin prices witness increased volatility amid ongoing Middle Eastern conflicts.

Hayes' Prediction on Oil Prices and Bitcoin

Arthur Hayes shared his views in a blog post, discussing how tensions between Iran and Israel might impact the global energy supply.

He argued that oil prices would soar if the Middle East conflict escalates and disrupts major oil and natural gas fields.

Oil prices would spike, dragging all other energy prices higher," he noted.

Arthur Hayes emphasized that nations dependent on oil could be forced to rely on alternative energy sources. And as energy becomes more expensive, it will likely influence Bitcoin's price.

Bitcoin is stored energy in digital form. Therefore, if energy prices rise, Bitcoin will be worth more in terms of fiat currency," Hayes explained.

The Impact of Rising Energy Prices on Bitcoin Mining

Arthur Hayes also explained how energy costs impact Bitcoin mining. He pointed out that mining profitability fluctuates depending on energy prices and the Bitcoin network's mining difficulty.

If energy costs soar, miners might find it less profitable to continue operations, which could lower the network's hashrate. However, as Hayes explained, the Bitcoin network adjusts automatically through difficulty changes.

If the hashrate drops, mining difficulty will also decline, making it easier for new entrants to mine Bitcoin at higher energy prices profitably," he added.

This ensures that even during energy price spikes, Bitcoin mining can remain sustainable.

Historical Comparisons and Market Reactions

Hayes cited past events where energy crises led to significant commodity gains to back his claims. During the oil crises between 1973 and 1982, oil prices rose by 412%, while gold surged by380%, almost matching oil's increase.

Although Bitcoin did not exist during those times, Hayes pointed out that it tends to correlate with commodities during inflationary periods. Should Middle Eastern oil supplies be disrupted, Hayes believes Bitcoin could behave similarly.

The Bitcoin blockchain will continue to function, and its price will at least hold its value against energy," he predicted.

He further suggested that Bitcoin's price would likely rise with respect to fiat currency during such an event.

Current Market Movements Amid Middle East Tensions

Recently, oil prices dropped, according to Oilprice.com, with West Texas Intermediate (WTI) declining by about 3.7%, reaching $71.09 per barrel.

Meanwhile, Bitcoin experienced a significant boost, gaining more than 8% over the week and surpassing $67,500 for the first time since July.

Amid the rising uncertainty, investors are also turning to other safe-haven assets, like gold. Recently,according to GoldPrice.org, Gold pricesclimbed to an all-time high of $2,711 per ounce.

Nitesh Shah, a commodity strategist at WisdomTree, told Reuters, Gold often is the place to go in times of uncertainty."

As tensions between Iran and Israel continue to unfold, the energy and financial markets remain closely linked. Hayes' prediction shows how geopolitical conflicts can affect the price of both commodities and cryptocurrencies.

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