BitMEX founder Arthur Hayes thinks the outbreak of war in the Middle East could actually benefit Bitcoin’s (BTC) price.
In a new analysis, Hayes outlines what might happen in the crypto space if the Israel/Iran conflict escalates.
The crypto veteran notes that Iranian Bitcoin miners account for up to 7% of the global hash rate. However, even if Israeli attacks destroy the crypto mining sector in the country, Hayes doesn’t think they will impact BTC’s price.
“Remember when China kind of banned Bitcoin mining in mid-2021, and the hash rate quickly dropped 63%?1 The hash rate recovered to its May 2021 high in only eight months. Miners relocated out of China, or other global players were able to boost their hash rate due to more favorable economics.
Most importantly, Bitcoin made a new all-time high in November of 2021. The severe drop in network hash rate had no discernible effect on the price. Therefore, even the complete annihilation of Iran at the hands of Israel or the US, which would knock out up to 7% of the global hash rate, would have no effect on Bitcoin.”
Hayes also speculates that oil prices could surge if the conflict grows and leads to the destruction of Middle Eastern oil infrastructure. The former BitMEX CEO thinks that would also lead to a spike in 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. Bitcoin mining profitability will remain unchanged because all miners face a parallel shift higher in energy price
It might be more challenging for some large industrial miners to secure energy as utilities at the behest of governments invoke force majeure clauses and cancel contracts. But if the hash rate drops, so does the mining difficulty, which makes it easier for new entrants to mine Bitcoin at higher energy prices profitably. The beauty of our Lord Satoshi’s creation will be on full display.”
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