How the price of Bitcoin will decrease during a possible oil crisis: Arthur Hayes

How the price of Bitcoin will decrease during a possible oil crisis: Arthur Hayes

Bitmex co-founder Arthur Hayes published an essay on Thursday in which he sketched "realistic potential situations", which could drive the oil price up and consequently let Bitcoin's price skyrocket.

The former CEO argued that such a scenario could spur the central banks around the world-including the Federal Reserve-to return to a market-friendly, relaxed monetary policy.

oil and the money printer

In his blog post with the title " curve ball ", described three possible future, which leads to a shortage of oil supply in view of the current geopolitical tension worldwide could.

For example, Iran could escalate his conflict with Israel/Saudi Arabia by closing Hormuz's road-one of the world's greatest oil passes between the Persian Gulf and the Gulf of Oman. Alternatively, large oil producers (Russia, Saudi Arabia, etc.) could significantly reduce their oil production or critical oil/gas infrastructures could be removed from the network due to “intentional sabotage”.

Hayes found that the first scenario would be most likely because Iranian uranium enrichment of Israel and Saudi Arabia could motivate military measures against Iranians. Due to the closure of the sea, the Iran would remove a whopping 17.3 million barrels a day from the global markets, which would make the border costs "extremely expensive" per barrel.

As a net importer of oil, consumers would ultimately have to pay this price in the United States. In order to fix the problem, the country would probably start drilling into its own undeveloped oil reserves to reduce prices again - an extremely capital -intensive undertaking.

"The only way to get more oil in Germany is to encourage local companies to increase Capex, which will require higher borrowing," wrote Hayes. "Therefore I believe that the FED would have to reduce interest in such a situation and loosen the financing conditions."

Bitcoin to the moon

lower interest rates are generally considered bullish for stocks and crypto. Bitcoin rose up to $ 69,000 in November 2021, when the Federal Reserve The key interest rate of LAG at only 0.25 %, but after 12 months to $ 15,500, because the feds fell all year round all year round increased.

"Since the amount of Fiat money is increasing together with inflation for the plebs in the world, money instruments with a fixed offer-like Bitcoin-are more valuable in terms of Fiat money," explained Hayes.

The co-founder added that Bitcoin could even decouple itself from stocks at this point-where it remained high correlated for years.

However, rising oil prices could also also burden the Bitcoin mining industry, which has recently returned to an average profit position thanks to the increasing price of Bitcoin.

.