Iran Oil Shock Likely to Impact Bitcoin Miners Through Price Volatility

Analysts say the recent oil market shock linked to the conflict involving Iran is more likely to affect Bitcoin miners through price volatility rather than higher energy costs. Research from Luxor Technology and its Hashrate Index examined how disruptions to global energy markets could influence mining profitability after tensions near the Strait of Hormuz disrupted tanker traffic.

Roughly 20% of the world’s oil supply typically passes through the strait. During the disruption, Brent crude prices briefly jumped from around $60 per barrel to more than $100 before easing toward $90.

Electricity Markets Limit Direct Oil Impact

Data from the Cambridge Centre for Alternative Finance and the Bitcoin Mining Council shows that more than half of the Bitcoin network operates on non-fossil energy sources. Analysts estimate that about 90% of global mining hashrate runs in electricity markets where power prices have little direct correlation with crude oil.

Instead of energy costs, analysts say miner profitability is more sensitive to Bitcoin’s market value. When Bitcoin prices decline, the mining revenue metric known as hashprice falls. Earlier this year, hashprice dropped to about $27.89 per PH/s/day after Bitcoin slid roughly 23.8% from around $78,000 to $65,000, highlighting how price swings influence mining income.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.