According to an analysis by Luxor Technology, Bitcoin miners may feel the impact of the oil crisis associated with the war in Iran, primarily due to price volatility. Bitcoin, not because of electricity bills.
According to the Cambridge Centre for Alternative Finance and the Bitcoin Mining Council, more than half of the Bitcoin network runs on energy sources other than fossil fuels, such as oil. Therefore, the impact of the Iran war on cryptocurrency mining is indirect.
Analysts estimate that approximately 90% of the global hashrate comes from electricity markets where prices are minimally correlated with crude oil prices. These include countries such as the United States, Russia, and China, followed by Paraguay, the United Arab Emirates, Oman, Canada, Ethiopia, and Kazakhstan. Many of these markets rely primarily on natural gas, coal, or hydroelectric power, rather than oil.
Only a small portion of the network operates in energy markets closely linked to oil. Gulf countries, including the UAE and Oman, account for approximately 6% of the global hashrate in power systems where electricity prices are directly dependent on oil prices. Taking into account additional risks associated with Iran, Kuwait, Qatar, and Libya, the total share of the network dependent on oil is approximately 8-10%.
The macroeconomic consequences of geopolitical upheavals pose a greater risk for miners. Rising oil prices could increase inflation expectations and impact interest rate forecasts, which could push investors toward lower-risk assets and away from volatile assets such as BitcoinThis will negatively impact the price of the flagship cryptocurrency and make its mining less profitable.