how oil affects bitcoin

given the current situation in the middle east, oil is gonna get even more limited. it's a super valuable and pricey resource. with distribution issues worldwide, everything's feeling the pinch. but hey, even before this whole drama with the us and iran, there have been studies looking at how oil prices and bitcoin's volatility are connected. they found out that these two actually move in opposite directions: when one goes up, the other tends to drop. so, when oil prices rise, electricity bills go up too, making bitcoin mining a whole lot more expensive. this might end up lowering bitcoin's volatility, which actually makes it look like a solid safe haven right now.

I am unable to have access to the site. This will be another rubbish research that is not worth it at all. Who cares if bitcoin price is inversely proportional to crude oil price. So this time that war started in ran, crude oil price went up but bitcoin price also later went up before it later fall below $70000 few hours ago. How about COVID 19 period, crude oil and bitcoin fall together until April that bitcoin price started to rise. Crude oil rise after and bitcoin get to ATH.

You should not forget that bitcoin does not really work by the economy situation of the world because the inflation may not have much effect on the market value since what determines bitcoin price is the demand and supply and not much of the economical imbalances tha that is happening, though we cannot draw a conclusion yet that there is no iota of significant effects that may come as a result of this oil crisis presently, just that the effect may be on a minimal level that could attract the market to go more volatile and respond in such direction for a while.

Oil isn't scarce - It's just being burnt in all the non productive wars, or sunk in ships out in the oceans. Then there are the plastic bags. I understand they have even found plastic bags at the bottom of the Mariana trench.

For the fact that the supply chain of crude oil is reduced as a result of the influence of the war between Israel & United States of America vs Iran, doesn't make crude oil a scarce asset or natural resources. Because for the fact that other nations might be receiving less crude oil due to the war, it doesn't mean there is no abundance of it in the Iran refineries ready for international supply. So I think that the less interest or volatile oil market will literally have a much influence on Bitcoin, dropping it's price, as the opposite might be the case, if people who had their investment in oil and sees that it is losing value, sell and reinvest it in Bitcoin, that's the only aspect where it can have influence on Bitcoin, but positively.

I cannot see any logic in why Bitcoin volatility becomes more stable when oil prices increase.  All I can see is that when there is an oil hike, the price of electricity spikes, and all other commodities follow because the transportation of materials becomes more expensive. Bitcoin might surge in price due to the miners demanding more since they are paying more for their hash activity but still Bitcoin market has lots of variables, and sometimes some factors are negligible.  Bitcoin has its own path, and the demand for Bitcoin, I believe, is somehow unrelated to the oil hike.

In my opinion, it won't always be that way. Rising oil demand will drive up electricity costs for mining, which will also impact the price of producing new BTC. But you forget that, given the current situation, the rise in oil demand could be due to the impending war. If war does break out, people will want to store their wealth safely, perhaps in gold, but gold is hard to carry & also space-inefficient. Those people will surely choose another option, one that's portable & space-efficient is BTC. When they realize this, they'll buy it on the market, which will increase demand & drive up the BTC price. Here I want to show that there are many factors, oil is not the only one. As a former researcher, I appreciate their findings regarding the oil price & the BTC market connection. Note to you bros @sleepfirefly, not all research results are always relevant. For social, economic & educational research, the longest period of relevance is only 5 years, the minimum is 3 years. In theory, that research result almost no longer relevant or is it just not relevant anymore now.

My thinking is it makes sense that electricity and other things that Bitcoin depends on gets more expensive thereby making Bitcoin more expensive to mine when oil as a cheap source of energy is not available so the miners need to buy the expensive electricity to keep their operations going. It has gotten really bad. Everytime I eat Sushi I am reminded of how much microplastic is in it. Disgusting.

Oil prices has already started to rise because of scarcity and the available oil prices is rising because the war is affecting region where major oil are being transported from the Middle East to other part of the world. But the increase price oil doesn’t affect the price of bitcoin. Bitcoin miners are not wishing factors can make other miners to stop mining bitcoin, oil price should not make bitcoin fall,  oil price can fall but bitcoin go up.

I don't see the logic in your thinking. Higher cost of electricity means higher cost for mining bitcoin, and that means miners will have to sell more bitcoins. Last year shown that bitcoin is not safe heaven like many people were thinking, it was following stock market and even performed worse in some cases. I think the main problem now is that Blackrock and similar corporations now own and manipulate bitcoin more than they used to do it.

I agree. It's not like there's only one energy source that people can have especially those who are mining bitcoin because there are other source too like solar energy. The price of Bitcoin should be from it's supply and demand. I understand why OP thinks that the oil supply to other places is scarce that makes the electricity cost rise because of war and also the price of Bitcoin decrease too so I guess op thought that it's the reason.

Imho the amount of bitcoins they'll sell depends on their strategy, but if the energy prices will grow, some miners may have to see if they can force the price rise (eg by selling less, heh) or just unplug their miners to avoid mining at loss. Of course, many others are unaffected, especially if they have their own solar (eg US) or have other special deals. The "scarcity" on markets will also depend on how the other big players (in producing or storing oil) will react. In this equation the storage and extraction capacities of US and Venezuela start to matter more than you've expected when Maduro was taken. In this equation it starts to matter a lot how much oil can Russia sell without getting caught. In this equation it will matter more than before how much it will rain in certain areas (hydro power), how much wind will be where the turbines are set up, how much sun will there be.. well, pretty much everywhere nowadays. This being said, the price of electricity is... complicated; it's not only tied to oil. And for bitcoin the fact there's the wrong year of the price cycle doesn't help.

Where predictions market now capilize on this kind of news and bad things, I expect people to throw propaganda, too my speculations and hype. Let me tell you something, there is no oil scarcity, rather there is oil hoarding. Marketers are the most evil set of people, when there is war like this and they start to hear talks about the current  condition of Strait of Hormuz, they used that as an excuse to hoard oil just for the price to increase so they can get money from their previous stock. When did the war started that there is already fuel scarcity, there is no where in the news that says Strait of Hormuz has been hijacked by Iran or they stop oil cargo movements but you know in war, there are people that get rich during such times and there are people that lose everything they have to this kind of things. Now, it's time for, I don't expect this to run for long time before everything collapsed again, the war can't go on forever.

Well, maybe there is a connection between oil and Bitcoin. Oil is a commodity that is essential for humans, especially for daily needs. So, when a global oil crisis occurs, it is likely to cause panic among Bitcoin holders, leading them to sell their Bitcoin (commonly known as panic selling). However, I don't think that will always be the case. Fundamentally, Bitcoin price is influenced by supply and demand. It may be that someday the price of Bitcoin will not be affected by the rise or fall in oil prices. Generally, people turn to gold when a crisis occurs, they considering it as a safe haven. I am sure there will come a time when people will turn to Bitcoin when a crisis occurs, and I think this is simply just about a related to generational matter, as I believe previous generations have been fixated on gold. I am very sure the next generation will be fixated on Bitcoin.

I also don't see any relationship at all, there could have been instance that the oil price did increase before as cost to those who are mining them. But we seldom heard any miners complaining about the increase in price. It is just magnified today because of the war and the suddenly increase again by the oil price. And miners will still continue to mine even if the price goes up, if we are talking about them capitulating, it could be on the price of Bitcoin, like it's going down hard to $10k or something, but it's not going to happen because Bitcoin is too big to fall.

I've got different idea than those research, the reason bitcoin's price diverge to oil is because when oil rises there is geopolitical tension and bitcoin is known to be impacted whenever there is world conflict. Right now strait of hormuz is closed, there is geopolitical tension and there is escalation of war, the oil rises because the distribution line is choked and bitcoin is dumping because there is war. This is not necessarily a inverse relationship between oil price and bitcoin but rather a coincidence. If it were something else beside oil, bitcoin's price would still go down due to the war.

Same here. That's what I think, although at first glance, since it comes from a supposedly scientific website, they should be clear that correlation does not imply causation. However, we have seen a lot of scientific articles of this kind.   That's right, it looks like it's multifactorial.

There is no connection. On the one hand, there is the most important energy resource on the planet, and on the other hand, there is a speculative asset that is only very indirectly related to oil (through electricity for mining). But let me say that everything in the world is connected with oil in one way or another! Just because oil is a source of energy. In this logic, you can associate anything with oil and find functional dependencies there. But these are all completely speculative comparisons, poorly connected with reality and practically useless.

I don't think it can be considered a safe haven just because it lowers the volatility, we can say the market is just exhausted or declining, I don't think it will protect investors at this moment because a sudden announcement, turn of events it could potentially risk of a dump or something. I'd probably be more wary but yeah it's more safe than those altcoins. Do you think this will be more applicable or advantage to Iran residents considering the conflict is in their region? Wherein store of value may good for them.

In my opinion, oil can only be scarce in the market due to government's failed or unfavourable policies, just like what is currently happening between the United States of America and Iran in this current war, whereas when it comes to Bitcoin, it is only affected due to demand for it only, and not a so called government policies. Because we could use the time of COVID19 as an example, whereby despite the numerous world isolation that was made, Bitcoin still skyrocketed, simply because it was a digital currency.  And thats the same way Bitcoin might also skyrocket during this world too, because if Iran is kind of sanctioned, then they might rather choose to use Bitcoin in foreign trade, rather than their fiat currencies.