If tensions between Iran and Israel escalate, Bitcoin should be expected to rise following a jump in oil prices, according to former BitMEX CEO Arthur Hayes in a new essay.
The scenario is possible in the event of an attack on large hydrocarbon deposits in an Islamic country.
According to the entrepreneur, mining profitability is regulated by changing the difficulty, but it decreases when the hash rate drops, âwhich makes it easier for new participants to mine at higher electricity costs.â
Hayes cited the historical example of a significant rise in commodity prices from 1973 to 1982 during the crises caused by the Arab 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 valid because Bitcoin has shown a certain correlation with commodities during periods of inflation.
On October 17, sources told The Washington Post that Israel plans to strike Iran "in the coming days." However, a final decision has not yet been made. Tel Aviv thus intends to respond to Tehran's attack on October 1.
Quantity Funds previously launched an exchange-traded fund based on a basket of gold and bitcoin futures and an ETP to hedge against inflation.
Recall that in a previous essay, Hayes explained the negative dynamics of tokens after listing on CEX.
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