• Arthur Hayes, co-founder of BitMEX, published an essay stating that if oil prices spike, Bitcoin’s price could skyrocket as a result.
• He outlined three potential scenarios which could lead to an oil supply shortage across the globe: Iran closing the Strait of Hormuz, large oil producers reducing their oil production, or critical oil/gas infrastructure taken offline due to sabotage.
• Hayes argued that such a situation would spur central banks to return to a market-friendly loose monetary policy.
Oil Crisis and Bitcoin Prices
Arthur Hayes, co-founder of BitMEX, published an essay outlining how Bitcoin’s price could skyrocket if energy prices spike. He described three possible futures that could lead to an oil supply shortage across the globe due to geopolitical tensions: Iran closing the Strait of Hormuz, large oil producers reducing their production output or critical oil/gas infrastructure being taken offline due to sabotage.
Impact on Central Banks
Hayes argued that such a situation would spur central banks across the world – including the Federal Reserve – to return to a market-friendly loose monetary policy in order to offset rising costs of energy. He suggested that this in turn would have a positive impact on Bitcoin’s price and its trading volume worldwide.
Strait of Hormuz Closing
The most likely scenario according to Hayes is for Iran to close down the Strait of Hormuz – one of the world’s largest oil chokepoints between Persian Gulf and Gulf Of Oman – removing 17.3 million barrels per day from global markets and making each barrel extremely expensive. In such case, he said “the money printer will be running at full speed” which will cause significant inflation in many countries and drive up demand for digital assets like Bitcoin as investors seek safe havens away from traditional markets.
The economic impact of these events can be far reaching; it can push petrol prices higher globally and make transportation more expensive while also pushing food prices higher as many agricultural products are derived from petroleum products or transported via petrol fueled vehicles. It may also lead Central Bankers into devaluing their currencies further while increasing interest rates in order alleviate pressure placed upon their economy by costly imports caused by increased demand for foreign goods derived from expensive imported fuels like crude oil .
In conclusion , if any one out of these three scenarios were realized it could potentially cause significant disruptions both economically and geopolitically leading Central Banks around the world into taking action which could benefit Bitcoin’s price significantly as investors take shelter from traditional markets into digital assets like BTC .