Bitcoin miners face greater risk from falling BTC price than oil surge

Saturday 14 March 2026 - 08:50

By: Dakir Madiha

Bitcoin miners face greater risk from falling BTC price than oil surge

Bitcoin mining companies are more vulnerable to fluctuations in the price of Bitcoin than to rising electricity costs triggered by higher oil prices, according to a new analysis examining the impact of the Iran related oil shock on the cryptocurrency industry.

A report released this week by Luxor Technology’s Hashrate Index found that roughly 90 percent of global Bitcoin mining operates in electricity markets that have little or no correlation with crude oil prices. As a result, the main threat to miners during a global oil shock is the macroeconomic effect on Bitcoin’s market value rather than higher power costs.

The study concludes that crude oil plays an almost negligible role in powering the Bitcoin network. Data from the Cambridge Centre for Alternative Finance indicates that more than half of the network runs on non fossil energy sources. The remainder is largely powered by natural gas, coal, hydroelectric energy, and nuclear power.

The United States accounts for about 37.5 percent of global Bitcoin mining hashrate, followed by Russia with 16.4 percent and China with 11.7 percent. None of these countries rely on electricity grids strongly linked to oil pricing, limiting the direct impact of crude price spikes on mining operations.

Only an estimated 8 to 10 percent of global hashrate operates in electricity markets where power costs move closely with oil prices. These operations are mainly located in Gulf Cooperation Council countries such as the United Arab Emirates and Oman.

Iran itself represents only about 0.8 percent of global Bitcoin hashrate, estimated at around nine exahashes per second. Even if crude prices remain above 100 dollars per barrel, the direct cost impact would be limited to this relatively small portion of the global network.

The larger risk for miners comes from volatility in mining revenues tied to Bitcoin’s price. February 2026 offered a clear example. During the month, Bitcoin fell by about 23.8 percent, dropping from 78,073 dollars to 65,204 dollars.

This decline pushed the network’s hashprice, a measure of daily mining revenue per unit of computing power, to a record low of 27.89 dollars per petahash per day on February 24. The monthly average hashprice fell by 17.9 percent to 32.31 dollars.

At these levels, mining revenue for older hardware operating in the efficiency range of 25 to 38 joules per terahash dropped to roughly 42 dollars per megawatt hour. That level is below the estimated network energy cost of about 50 dollars per megawatt hour, leaving older mining equipment operating at a loss.

According to CryptoSlate, the electricity cost alone required to mine one Bitcoin has risen to about 74,600 dollars. JPMorgan estimates the average total production cost at nearly 77,000 dollars.

Geopolitical tensions related to Iran have added to the pressure on the crypto market. Oil prices surged after US intelligence indicated that Iran could mine the Strait of Hormuz, a key maritime route that carries roughly 20 percent of the world’s daily oil supply.

Brent crude briefly approached 120 dollars per barrel before retreating after signals from the White House suggested the conflict might end soon. Bitcoin temporarily fell below 70,000 dollars following the news before stabilizing.

Analysts say the broader economic reaction explains the link between oil shocks and cryptocurrency markets. Rising oil prices tend to increase inflation expectations, lift US Treasury yields, and tighten global liquidity conditions, factors that typically weaken risk assets such as Bitcoin.

Hashrate Index concluded that geopolitical uncertainty that pushes Bitcoin’s price lower has a far greater effect on miners than any increase in electricity costs linked to oil.