Oil Crisis to Impact Bitcoin Miners Through Price Volatility, Say Analysts

Oil price rise impacts bitcoin miners through volatility, not electricity costs, say analysts.

The rise in oil prices due to the war in Iran will affect bitcoin miners not so much through increased electricity costs, but rather through the volatility of the cryptocurrency itself. This conclusion was reached by Hashrate Index. 

Analysts assessed the crisis’s impact following US and Israeli strikes on Tehran, which disrupted shipping in the Strait of Hormuz. Under normal circumstances, about 20% of the world’s oil supply passes through it. 

Due to these disruptions, the price of Brent crude soared from $60 to over $100 per barrel, later retreating to $90. However, the direct correlation between the cost of digital asset mining and oil prices proved minimal.

Who Really Depends on Oil? 

According to the Cambridge Centre and Bitcoin Mining Council, more than half of the first cryptocurrency’s network capacity is powered by alternative energy sources. The share of fuel oil and diesel in miners’ energy balance is a “statistical error,” analysts humorously noted.

The US, Russia, and China hold the largest shares in the global hashrate, followed by Paraguay, the UAE, Oman, Canada, Ethiopia, and Kazakhstan. In most of these countries, power generation relies on gas, coal, or hydropower. The connection to oil is minimal.

Only a small portion of the network’s computing power depends on energy systems where electricity prices truly correlate with fuel. The UAE and Oman concentrate about 6% of the global hashrate. Including Iran, Kuwait, Qatar, and Libya, the share of regions “sensitive” to oil reaches 8-10%.

Experts emphasized that even with such a correlation, the effect manifests with a delay due to long cycles of tariff revision.

Bitcoin Price Matters More Than Electricity Bills

According to researchers, the main threat to miners is macroeconomic consequences. Rising oil prices accelerate inflation expectations and influence rate forecasts, prompting investors to exit risky assets, including bitcoin. This pressures mining profitability through the compression of hashprice.

This trend was already evident earlier this year. In February, the indicator fell to a historic low of $27.89 per PH/s per day amid a 23.8% bitcoin slump (from $78,000 to $65,000). 

Some miners used forward contracts on hashrate to lock in the sale price of their computing power in advance. Over the past year, this strategy has been 8.2% more profitable compared to traditional spot mining.

At the time of writing, the hashprice remains at $31.5 per PH/s. The seven-day moving average of the total computing power of equipment is estimated at 1.02 ZH/s.

As a result of the latest recalculation on March 5, mining difficulty remained almost unchanged, increasing by 0.45%.

Earlier, Wintermute declared the traditional bitcoin mining model obsolete. Matthew Sigel, head of digital assets at VanEck, assessed the prospects of companies transitioning to AI.