BitMEX founder Arthur Hayes thinks the outbreak of war in the Middle East could actually benefit the price of Bitcoin (BTC).
In a new one analysisHayes outlines what could happen in the crypto space if the conflict between Israel and Iran escalates.
The crypto veteran notes that Iranian Bitcoin miners account for up to 7% of the global hash rate. But even if Israeli attacks destroy the country’s crypto mining sector, Hayes doesn’t think it will affect the price of BTC.
“Remember when China more or less banned Bitcoin mining in mid-2021, and the hash rate quickly dropped by 63%?1 The hash rate recovered in just eight months to its May 2021 high. Miners moved out China, or other global players, could increase their hash rate due to more favorable economic conditions.
Most importantly, Bitcoin hit a new all-time high in November 2021. The severe drop in the network hash rate had no discernible effect on the price. Therefore, even the complete destruction of Iran by Israel or the US, which would take away up to 7% of the global hash rate, would have no effect on Bitcoin.”
Hayes also speculates that oil prices could rise as the conflict grows and leads to the destruction of the Middle East’s oil infrastructure. The former CEO of BitMEX thinks this 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 as all miners face a parallel shift to a higher energy price
Securing energy could be more challenging for some large industrial mining companies as utilities invoke force majeure clauses and cancel contracts on behalf of governments. But as the hash rate drops, the mining difficulty also increases, making it easier for newcomers to profitably mine Bitcoin at higher energy prices. The beauty of our Lord Satoshi’s creation will be on full display.”
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