The rise in oil prices due to the conflict in Iran will affect Bitcoin miners more through cryptocurrency volatility than through increased electricity costs, according to Hashrate Index.
Analysts assessed the crisis's impact following U.S. and Israeli strikes on Tehran, which disrupted shipping in the Strait of Hormuz, a route for about 20% of global oil supplies under normal conditions.
Due to these disruptions, the price of Brent crude surged from $60 to over $100 per barrel, later retreating to around $90. However, the direct correlation between the cost of mining digital assets and oil prices turned out to be minimal.
Who Really Depends on Oil?
According to the Cambridge Centre and the Bitcoin Mining Council, over half of the Bitcoin network's mining power is sourced from alternative energy. The share of fuel oil and diesel in miners' energy balance is considered a "statistical error," experts quipped.
The U.S., Russia, and China hold the largest shares of global hashrate, followed by Paraguay, the UAE, Oman, Canada, Ethiopia, and Kazakhstan. In most of these countries, energy generation relies on gas, coal, or hydropower, with minimal connection to oil.
Only a small portion of the network's computational power relies on energy systems where electricity prices correlate with fuel costs. The UAE and Oman account for about 6% of the global hashrate. Including Iran, Kuwait, Qatar, and Libya, the share of regions sensitive to oil could reach 8-10%.
Experts emphasized that even with such a correlation, the effect manifests with a delay due to long tariff review cycles.
Bitcoin Price Matters More Than Electricity Bills
Researchers believe the main threat to miners comes from macroeconomic consequences. Rising oil prices fuel inflation expectations and impact interest rate forecasts, prompting investors to exit riskier assets, including Bitcoin. This pressure reduces mining profitability through a contraction in hash price.
This trend was already evident earlier this year. In February, the hash price fell to a historic low of $27.89 per PH/s per day amid a 23.8% drop in Bitcoin (from $78,000 to $65,000).
Source: Hashrate Index.
Some miners used forward contracts on hashrate to lock in the selling price of their computational power in advance. Over the past year, this strategy proved to be 8.2% more profitable compared to traditional spot mining.
As of this writing, the hash price stands at $31.5 per PH/s. The seven-day moving average of total computational power is estimated at 1.02 ZH/s.
As a result of the latest recalculation on March 5, mining difficulty barely changed, increasing by 0.45%.
Recall that Wintermute declared the traditional Bitcoin mining model outdated. Matthew Sigel, head of digital assets at VanEck, assessed the prospects for companies transitioning to AI.