Former BitMEX CEO Arthur Hayes suggested that if tensions between Iran and Israel escalate, Bitcoin could experience a significant price surge, driven by rising oil prices. In his latest essay, he explained that if Iran’s major oil fields were attacked, Bitcoin could follow the spike in energy prices.

The Connection Between Oil and Bitcoin

Hayes explained that Bitcoin can be seen as a digital representation of energy, creating a link to commodities like oil and gas.

“What will happen to Bitcoin’s price in fiat terms? It will jump. The first cryptocurrency is energy in digital form. So, if oil and gas prices rise, Bitcoin will also rise,” Hayes stated.

Impact on Mining

Hayes also pointed out that the profitability of Bitcoin mining is regulated by the network’s difficulty level, which decreases when hash rate drops. This makes mining easier for new participants, even as energy costs rise.

Historical Context

Hayes drew parallels with the crises of the 1970s, when oil prices soared by 412% during the Arab oil embargo and the Iranian Revolution, while gold prices rose by 380%. He added that during inflationary periods, Bitcoin has already demonstrated a correlation with raw commodities.

Escalation of Conflict

On October 17, sources from The Washington Post reported that Israel was planning to strike Iran in retaliation for Tehran’s October 1 attack. This event could trigger a rise in energy prices and, consequently, an increase in Bitcoin’s value.

Conclusion

Earlier, Quantity Funds launched an exchange-traded fund based on futures and ETPs for gold and Bitcoin to hedge against inflation, highlighting the relevance of Bitcoin as an asset in times of economic instability.

In his previous essay, Hayes also examined the negative trends of crypto tokens after being listed on centralized exchanges.