• Arthur Hayes, the co-founder of BitMEX, discussed three potential scenarios that could lead to an oil shortage and cause a surge in Bitcoin’s price.
• The first scenario Hayes outlined was a conflict between Iran and the Middle East that results in the closure of the Strait of Hormuz.
• If this happens, it would drastically reduce global oil supply by 17.3 million barrels per day and greatly increase prices.
Oil Crisis Could Moon Bitcoin Prices
BitMEX co-founder Arthur Hayes published an essay on Thursday outlining „realistic potential situations“ that could make oil prices skyrocket, resulting in a surge for Bitcoin’s price as well. In his blog post titled „Curve Ball,“ Hayes described three possible futures that could lead to an oil supply shortage across the globe given current geopolitical tensions.
Conflict Between Iran And Israel/Saudi Arabia Could Close Strait Of Hormuz
The most likely scenario discussed by Hayes is a conflict between Iran and Israel/Saudi Arabia which would result in the closure of the Strait of Hormuz – one of the world’s largest oil chokepoints between the Persian Gulf and the Gulf of Oman – removing 17.3 million barrels per day from global markets. This would create an extreme shortage causing prices to sky rocket due to high demand with low supply.
Large Oil Producers Reducing Production
Hayes also mentioned another potential scenario where large oil producers (Russia, Saudi Arabia, etc.) choose to materially reduce their production levels which again lowers global supply leading to higher prices for consumers worldwide due to increased demand for limited resources.
Critical Infrastructure Taken Offline
The last event mentioned by Hayes is critical infrastructure being taken offline due to deliberate sabotage such as cyberattacks or military strikes against power grids or pipelines used for transportation purposes like those found in Ukraine or Syria recently. Again, this action would further decrease global supplies leading to higher costs for consumers worldwide..
Central Banks Likely To Return To Loose Monetary Policies
In conclusion, if any of these scenarios take place it will have major implications on both energy markets and Bitcoin’s price as central banks around the world are likely respond with looser monetary policies designed to stimulate economic growth during turbulent times such as these.