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BitMEX co-founder Arthur Hayes predicts Bitcoin’s price will rise alongside surging oil and energy prices if tensions between Iran and Israel boil over.
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Bitcoin prices will surge if escalating tensions in the Middle East cause oil and energy prices to rise, according to Arthur Hayes, co-founder of the crypto exchange BitMEX.
Hayes wrote in an Oct. 16 blog post that “oil prices would spike” in the scenario that Iran decided to strike major oil and natural gas fields in an escalated conflict with Israel which he added would “drag all other energy prices higher as nations short on oil would use other energy substitutes to power their economies.”
“What happens to the fiat price of Bitcoin? It pumps,” he said.
“Bitcoin is stored energy in digital form. Therefore, if energy prices rise, Bitcoin will be worth more in terms of fiat currency.”
Hayes said that mining profitability would adjust through difficulty changes, however, if the hash rate drops, the mining difficulty will also, “which makes it easier for new entrants to mine Bitcoin at higher energy prices profitably.”
Hayes provided a historical example of large gains in commodities from 1973 to 1982 during the oil crises caused by the Arab oil embargo and the Iranian revolution. Oil prices rose 412% and gold rose 380%, nearly matching oil’s increase.
While Bitcoin (BTC) hasn’t existed during major oil crises, it has shown some correlation with commodities during inflationary periods.
Should Middle Eastern oil be removed from the market “the Bitcoin blockchain will continue to function, and the price will, at minimum, hold its value vs. energy and definitely rise in fiat currency terms,” he said.
Oil prices have fallen this week with West Texas Intermediary dropping by around 3.7% since Monday to $71.09 per barrel on Oct. 17, according to Oilprice.com.
Meanwhile, Bitcoin gained more than 8% over the week, topping $68,000 for the first time since late July in early trading on Oct. 18.
Related: Bitcoin should be treated as a commodity, like gold — Cantor Fitzgerald CEO
Gold has continued to climb, hitting an all-time high of over $2,700 an ounce. Source: Kitco
Gold prices also hit an all-time high this week reaching $2,711 per ounce on Oct. 17, according to GoldPrice.org.
The gain comes as investors turned to safe-haven assets amid uncertainty about the upcoming US election and mounting tensions in the Middle East.
Israel has warned it would strike Iran in retaliation for an attack in early October. Iran launched a salvo of around 180 missiles in response to Israeli airstrikes against Iranian-backed Hezbollah militants in Lebanon.
“Gold often is the place to go in times of uncertainty,” Nitesh Shah, a commodity strategist at WisdomTree, told Reuters on Oct. 17.
Magazine: Edgelord 3AC’s bet on memecoin supercycle, seeks ‘racist cult leader’: Asia Express
This article first appeared at Cointelegraph.com News
