Arthur Hayes Predicts Bitcoin Surge Amid Iran-Israel Tensions

Should tensions between Iran and Israel escalate, a rise in Bitcoin is expected to follow a spike in oil prices. This forecast was presented by former BitMEX CEO Arthur Hayes in a new essay.

This scenario could unfold if there is an attack on major hydrocarbon deposits in the Islamic country.

“What will happen to the price of Bitcoin in fiat? It will pump. The first cryptocurrency is energy stored in digital form. Therefore, if oil and gas prices rise, it will also become more expensive,” the expert explained.

According to the entrepreneur, mining profitability is regulated by changes in difficulty, but it decreases with a drop in hash rate, “which makes it easier for new participants to mine at higher electricity costs.”

Hayes cited a historical example of significant commodity price increases from 1973 to 1982 during crises triggered by the Arab oil embargo and the Iranian revolution. At that time, oil prices jumped by 412%, and gold by 380%.

The former BitMEX CEO explained that the analogy is permissible since Bitcoin has shown a certain correlation with commodities during periods of inflation.

On October 17, sources from The Washington Post reported on Israel’s plans to strike Iran “in the coming days.” However, a final decision has yet to be made. Tel Aviv intends to respond to Tehran’s attack on October 1.

Earlier, Quantity Funds launched an exchange-traded fund based on a basket of futures and ETP on gold and Bitcoin to hedge against inflation.

In a previous essay, Hayes explained the negative dynamics of tokens after listing on CEX.