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BitMEX co-founder Arthur Hayes has suggested that increased tensions in the Middle East could lead to a rise in Bitcoin prices. Hayes postulated a scenario wherein attack on oil and natural gas fields by Iran could potentially lead to a conflict with Israel, resulting in high energy costs and an increased Bitcoin value. With Bitcoin seen as a form of digital energy storage, it could continue to profit even with higher energy costs. As geopolitical uncertainties increase, investors tend to move towards safe-haven assets such as gold and Bitcoin, which have currently recorded highs.

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According to Arthur Hayes, co-founder of crypto exchange BitMEX, rising tensions in the Middle East could drive up the price of Bitcoin. Hayes suggests that if these tensions lead to increased oil and energy prices, it could also boost the value of Bitcoin. In a recent blog post, he mentioned that if Iran were to attack major oil and natural gas fields, leading to a conflict with Israel, other forms of energy would become more expensive as countries having less oil would depend on other sources. This would in turn push up the price of Bitcoin.

Hayes explained that Bitcoin is like stored energy in digital form, so when energy costs go up, so does the value of Bitcoin. He also mentioned that Bitcoin mining would remain profitable even with higher energy costs, as the mining difficulty adjusts with the hash rate. If the hash rate drops, so would the mining difficulty, making it easier for newcomers to mine Bitcoin profitably.

He gave the example of commodity gains during the oil crises of the 1970s, where oil and gold prices skyrocketed. Although Bitcoin didn’t exist during those crises, it has shown a similar pattern with commodities during inflationary periods.

This week, oil prices have decreased and Bitcoin has gained more than 8%, reaching its highest value since late July. Meanwhile, gold prices have also hit a record high, due to the increased uncertainty surrounding the US election and rising Middle East tensions. These geopolitical events often drive investors to safe-haven assets, such as gold and potentially, Bitcoin.

Source: Cointelegraph