Bitcoin volatility poses greater risk to miners than oil prices

Bitcoin price volatility is expected to have a greater impact on the mining industry than rising energy costs stemming from the conflict in Iran, according to a recent report from Luxor Technology cited by The Block. The report noted that approximately 90% of the global hashrate is powered by electricity sources whose costs are not significantly tied to oil prices. However, Luxor analyzed that rising oil prices could influence inflation expectations and interest rate outlooks, potentially leading investors to move away from volatile assets like Bitcoin. This, in turn, could put pressure on the hash price, a key metric for mining profitability. Meanwhile, Wenny Cai, COO of SynFutures, said that while geopolitical tensions in the Middle East have strengthened the U.S. dollar, creating a short-term headwind for risk assets, the U.S. Federal Reserve's easing cycle and global liquidity continue to stimulate institutional demand for cryptocurrencies.